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Friday, June 29, 2007

Pop Economics

posted by on June 29 at 12:40 PM

Steven E. Landsberg, Slate columnist and author of More Sex Is Safer Sex: The Unconventional Wisdom of Economics, holds this as truth:

The problem with the Western idea of eliminating sweatshops is that it only eliminates one of the few options people in intense poverty have. They can either send their children to sweatshops to work, or send their children to bed hungry. This level of child labor existed in the US and Britain when those countries had the same level of poverty, and as our incomes rose, the level of child labor dropped proportionately—without the involvement of richer countries.

If this is true, it renders an entire pop cultural phenomenon misguided:

RSS icon Comments

1

Not necessarily. American Apparel could succeed for reasons that have nothing to do with inhumane conditions elsewhere (higher quality product, increased efficiency from everything being produced in-house, etc.)

I'd go into more detail, but that ass is making me drool all over my keyboard.

Posted by tsm | June 29, 2007 12:56 PM
2

Ari could be a strong contestant in Science Idol.

Posted by Garrett | June 29, 2007 12:56 PM
3

American Apparel has a schtick: Hot models and Sweatshop-Free. Hot models lacks integrity as a schtick, but it is appealing to our basest instincts, which we can then back up with the cover language ("I don't buy this t-shirt because of the Hot Models, I'm actually buying it because it's the Right Thing To Do.") If the Right Thing To Do may not actually be The Right Thing To Do, all they have is their skanky aesthetic. Their integrity is erased.

Posted by Ari Spool | June 29, 2007 1:00 PM
4

you didnt think about it fully ari. American Apparel has a very small dent in the mechanics of overseas sweatshops. Shutting down sweatshops overseas would also have very little impact on American Apparel. while they do the same thing their intended market is different.

Here is where I see him coming from. If the solution to the humanitarian concerns of sweatshops is to simply shut them down, the unintended consequence of that is to deprive people of any labor they are actually qualified to do. Given that we make farming so unprofitable for developing nations, and given that absent farming to provide for themselves and sell for a profit, people of developing nations are not skilled to do other, higher paying work, what will fill the void?

I read landsburgs book and it's very interesting, but not to be taken as complete economic solutions to economic problems. it's more of a "gear your mind to think like an economist" exercise.

Posted by Bellevue Ave | June 29, 2007 1:03 PM
5

Its kinda of like how slavery was also way better for the slaves than freedom. I just don't see why people don't get this. It's totally okay and even good for poor people to have their rights abused because that is what happened to us before AND everyone knows that all nations MUST follow our exact pattern of development to be successful.

Instituting international trade agreements that include basic worker, human rights and environmental protections would ruin all "developing economies*" because instantly all their wages and costs of operation would be the same or higher than those of the developed world and we westerners would all go get jobs making jeans and tennis shoes. That would just be selfish of us. So go buy new jeans and help a 14 year girl keep her job working 12 hours a day!

* There really isn't much evidence that any of these economies are actually "developing," but it sure is nice to think of it that way!

Posted by Lanik | June 29, 2007 1:09 PM
6

That girl's ass certainly isn't impoverished.

Posted by Gomez | June 29, 2007 1:10 PM
7

Thongs are always misguided.

Oh! You mean the child labor thing. No, child labor is wrong too. It's also stopgap. If you make sure the little bastards get a free education, then they can move beyond the sweatshop and when they grow up, can work in a microprocessor factory.

Posted by Gitai | June 29, 2007 1:10 PM
8

lanik, all your strawmen and hyperbole aside you are forgetting a few things.

1. They arent being forced to work in sweatshops and if they are that is the issue of their national government in relations to human rights. You're essentially saying it's the business' responsibility to ensure human rights in their factories but you personally have no interest in that business decision. In fact you are making passive decisions that make you feel good at the expense of other people
2. You also ignore the basic premise that you need resources to grow your economy. The fact is the most important resources in developing nations are in fact labor and raw materials because they DONT have the same history as us.
3. I dont like IMF or Worldbank other than bailout purposes for currency and other really catstrophic problems.
4. I also dont like the American protectionism that goes on. Fuck rural american farmers, fuck protecting jobs here. If someone else can do it cheaper, they should be given the opportunity to do so.

Posted by Bellevue Ave | June 29, 2007 1:23 PM
9

Sweatshops and labor unions don't mix. A government that protected workers' right to organize would do away with sweatshops by mediating workers' claims instead of sending out police forces to kill them when they go on strike. The jobs wouldn't disappear unless corporations simply punished the unions by fleeing the country (like Walmart-- also like most manufacturing companies did to the US). Which shows exactly why we need to regulate the global economy so corporations can't cozy up with dictators and fascists to drive everyone's wages down. Most economists are blind to how power works...

Posted by wf | June 29, 2007 1:26 PM
10

Lanik,

Is China not developing enough for you? If not, what is development in your mind? In absolute terms, it's the largest transition out of poverty in the history of mankind.

Do you really trust American unions (and their representatives in Congress) to consider first the welfare of foreign workers, or do you think they might use it as an excuse to keep out foreign goods? There's a reason other governments oppose our ability to impose standards that may entirely erode their competitive advantage.

Posted by MHD | June 29, 2007 1:27 PM
11

is american apparel "shticky"? is decent wages for garment workers a gimmick? is american apparel even "skanky"? even now that they've branched out from their original designs, bold solid colors still seem to predominate their clothing lines. furthermore the brand's use of a high-contrast black helvetica typeface on a white background for their ubiquitous-seeming promotional campaign seems to convey a simplicity and humility that i feel again in their stores, though i somewhat instinctively associate helvetica with helpful public announcements since i'm from brooklyn (it's the mta/subway's font of choice for all of their informational signage, from track work alerts to directions on how to get to cultural events to "hold the handrail so you don't trip and crack your assbone" reminders).

Posted by josh | June 29, 2007 1:30 PM
12

I haven't read that book, but even so at first glance I'd have to say beware of facile comparisons of the modern global economy to the U.S. and Britain's economy 150 years ago. This argument is boilerplate free-market boosterism. The same arguments against insisting that countries like China adhere to any kind of standards on labor rights are also routinely invoked against any insistence on intrusive, trade-discouraging environmental or safety oversight. Deregulation is good! The free market solves everything. Enjoy your poison toothpaste!

Posted by flamingbanjo | June 29, 2007 1:35 PM
13

I haven't read Landsburgs book yet, but if its anything like that other pop "economics" book, "Freakanomics", then don't put too much faith in anything it suggests.

The "shutting down sweatshops only leaves these families with no other source of income" only makes sense if we can't imagine that there exists the possibility of a non-sweatshop,non-forced-labor, factory in an third-world nation. A "sweatshop" that no longer imposes sweatshop conditions on its workers is no longer a sweatshop. Has it been "eliminated"?

The anti-sweatshop campaign is about improving conditions in these factory, not about eliminating the factories altogether. These hypothetical costs of the campaign are ridiculous until someone presents evidence of the anti-sweatshop campaign sacrificing the good for the perfect.

Maybe that evidence, studies and statistics, not anecdotes, is in the book. If it's not then Landsberg has much to answer for.

Posted by dirge | June 29, 2007 1:37 PM
14

the built in mechanism that makes dictators and facists less profitable and desireable is that both exist to simply benefit themselves at the expense of the world, their people, and their economies.

also the worlds general disdain for dictators and world action to fight it when it serves them is another mechanism.

economists understand power very well. their concept of power is different than just political power.

Posted by Bellevue Ave | June 29, 2007 1:41 PM
15

This topic makes me giggle.

It's a refreshing intelligent conversation with a slight mix of sophomoric and lustful commentary. I think it's beautiful.

I know nothing about sweatshops other than what I know about Kathy Lee Gifford, so I'll claim naivety here.

My question is - how many times can that photo be used for DIFFERENT Slog posts in one week's time?

Ari, I hate to tell you this, but you're now tied with Kelly O for my favorite Slog poster. Although, I totally stalked you today by finding your myspace. I was gleeful when I found it.

Oh Hai! KTHANKSBYE

Posted by Sam | June 29, 2007 1:46 PM
16

Bellevue,

I am not arguing for American protectionism. I do not think that minimum standards for workers rights and environmental protections in international trade agreements will bring these jobs back to the US. Labor will still be cheaper in other countries. In fact, I think that the US should stop subsidizing our industries and end protectionist tariffs.

I don't think you can rationalize away child labor and dehumanizing work conditions with fuzzy references to "free" market theory.

I will vote for politicians that support trade policies that include basic worker and environmental protections and that work to end subsidies to American agriculture and industry.

Posted by Lanik | June 29, 2007 1:49 PM
17

Child labor is only one of many problems with sweatshops. There are also the incredibly poor working conditions. Then there's the massive amounts of international freight, which contributes more to global warming than all the cars in the world.

How does Landsberg's analysis take into consideration the MANY sweatshops in the United States and other rich countries? If we keep increasing our average income, these American sweatshops will close down by themselves?

Cambodia used to be one of the most sweatshop-filled nations on the planet, but in the past few years they've passed strict anti-sweatshop laws and their garment industry is booming. It turns out treating workers right is more profitable than running sweatshops. They did this because of international intervention -- protests, legislation, international watchdog groups, etc.

Posted by jamier | June 29, 2007 1:51 PM
18

heres the problem though and part of how you're reading is there.

simply eliminating sweatshops wont help anything. reforming might or might not because there is always a person that has no standard. this is game theory folks.

also freakonmics is a great book not simply because its pretty much right but because its makes you think about the mechanics of economy.
as i stated landsbrg book is more about the concepts not solutions.

as for china...and global economy; its not like 150 years ago. thats the point! we cant use standard solutions like unions that made sense when labor capital and raw materials usually remained local. unions are good in general as long as they achieve their goal. as soon as that starts slipping the union hurts people ala detroit

Posted by Bellevue Ave | June 29, 2007 1:54 PM
19

Bellevue,

Maybe it is just me, but it seems like you are using a lot of words to say not a lot.

What do you mean exactly by "this is game theory folks."? Explain to me how a few sleazy operators will undermine all efforts at improving working conditions. (Haven't worker protections worked in many other situations? I mean I don't work 12 hours a day in a coal mine like my grandparents.)

And you keep talking in very general terms about these popular books and about china, but really, what the fuck are you saying?

Posted by Lanik | June 29, 2007 2:05 PM
20

i don't think the choice is to either have abusive sweat shops or no have no garments produced in economically challenged countries.

instead of closing sweat shops, having minimum rules (especially if instigated by the corporation) would go a long way to help the local economy, while still offering cheap labour. you don't have to pay a worker the US minimum wage... just just don't have to hire children, or make people work 14 hour days.

Posted by infrequent | June 29, 2007 2:05 PM
21

domestic sweatshops are illegal and are banking on the fact they wont get caught. they exist because the people that found them dont have the means to export the labor to cheaper place so they have to operate in the shadows. its not for a lack of wanting but a lack of ability that they exist.

if what you say about cambodia is true...awesome! how do you convnce other nations though? game theory at work. also cambodia had the garment trade down so the shift wouldbt be as harsh. the expertise, labor, and infrastructure allowed that. would that happen in a nation that reduced influx of capital due to human rights?

Posted by Bellevue Ave | June 29, 2007 2:07 PM
22

heres the problem though and part of how you're reading is there.

simply eliminating sweatshops wont help anything. reforming might or might not because there is always a person that has no standard. this is game theory folks.

also freakonmics is a great book not simply because its pretty much right but because its makes you think about the mechanics of economy.
as i stated landsbrg book is more about the concepts not solutions.

as for china...and global economy; its not like 150 years ago. thats the point! we cant use standard solutions like unions that made sense when labor capital and raw materials usually remained local. unions are good in general as long as they achieve their goal. as soon as that starts slipping the union hurts people ala detroit

Posted by Bellevue Ave | June 29, 2007 2:09 PM
23

#15: Please don't stalk people. It's unhealthy, and it makes me feel paranoid about my (fairly inconspicuous) personal internet presence.

Posted by Ari Spool | June 29, 2007 2:12 PM
24

Inconspicuous my ass! And you must expect stalking if you're going to tell me that the ol' Capt. America is dead before mine eyes have seen the glory of the coming of the comic book.

Posted by Sam | June 29, 2007 2:22 PM
25

P.S. ~ you know how I found it? I typed in "Ari Spool" profile (trying to learn more about you as I have also read more about other Stranger writers, only because I'm a nosy writer, not a stalker, so don't worry).

Fourth link down, dude. Not that hard. I went to no effort. Just trying to learn more about you.

Now you've made me paranoid about my innocent research.

Posted by Sam | June 29, 2007 2:24 PM
26

@3 Ari -

"If the Right Thing To Do may not actually be The Right Thing To Do, all they have is their skanky aesthetic."

But my point was that AA's advantage can rely on more than just a moral sway. I've been pretty happy with the AA stuff I own, in terms of both style and workmanship, and combined with their not-too-unreasonable prices I could find sufficient reason to keep buying from them, with our without the bootylicious advertisements.

Regarding Landsburg: like a lot of his ideas, there's a kernel of interesting truth taken to some dumb conclusions. Child labor didn't end naturally in the Western world because of increased trade and prosperity; it ended because of laws brought on by popular demand. He presents no reason to believe this will happen elsewhere. Also, child labor isn't the only concern with these places - I'm just as disturbed by abuse of the adult workers, especially those who attempt to organize.

Posted by tsm | June 29, 2007 2:26 PM
27

lanik, im trying not to go to fast for you.

game theory. in the world economy there are honest countries, dishonest countries, and maybe honest countries. this is in regards to human rights, btw.

if the benefit of being dishonest vs. being honest is greater than being honest vs. being honest, then the country will choose to be dishonest.
by the same token if there are several players and the benefit of going honest puts you at a disadvantage relative to the dishonest players you wont do it. this is why smoking bans at bars had to be mandated.

at some point though you reap the same rewards and be honest without losing out to the dishonest. simple enough?

as for the improvement of our lot and not working 12 hour days it resides in a few things. infrastructure, technological growth, the ability for people to demand change.

We dont live in the same time period nor are the circumstances the same. Unions can be brought down by labor shifts. Why is that though? In the 1800s we were not a nation that relied on exports and imports for a large part of our economy. In fact the idea that you could just pick up your factory and move it involved a lot of work, not only in building a new factory near water, but also in having people with the skills.

We dont live in that world any longer. We dont rely on localism to protect us from world changes because we rely so much on the rest of the world.

and as for the concepts of the book.
1. opportunity cost
2. unintended consequence
3. go read the books.

Posted by Bellevue Ave | June 29, 2007 2:34 PM
28

i agree, he does take things to an impossible conclusion at times, or disgusting conclusion for people. but what he is doing is gearing your mind towards figuring some of these things out.

child labor didnt end simply because we willed it to. it ended because we willed it to, and because it was possible to.

Posted by Bellevue Ave | June 29, 2007 2:40 PM
29

part of the problem for a lot of the countries is in fact infrastructure. In "the end of poverty" sachs clearly and plainly shows how having to fight disease, hunger, and lack of basic health neccesities limits any possible economic growth.

I want to help most of the world in this regard. Improve the health of people worldwide and the infrastructure (water, communication, transportation) to better the lives of people. These are things that are politically neutral which is why people dont want to do it from both sides.

Posted by Bellevue Ave | June 29, 2007 2:59 PM
30

Bellevue,

I know what game theory is, but what I wanted was an explanation for why game theory means we can't improve working conditions, and you attempted that - so thanks. I still think it would be possible to improve working conditions for most people while some countries and underground sweatshops may still find ways around it.

But you say, "as for the improvement of our lot and not working 12 hour days it resides in a few things. infrastructure, technological growth, the ability for people to demand change."

I think people are starting to demand change. It doesn't happen magically overnight, but this is what hopefully will grow into a movement that will have the power to demand some minimum labor standards. I don't understand why you insist on attacking people that advocate for making those changes.

Finally, the comment, "go read the books" is lovely. Asshole.

Posted by Lanik | June 29, 2007 3:07 PM
31

Ha. I wouldnt have said it if I didnt know you would reply in kind.

I dont dislike the change, I dislike the simple minded methods that some people advocate. Just leaving it to markets obviously doesn't work that well in situations where a lack of basic means to have market works.

and slapping around business and other countries with our big floppy dicks hasnt exactly yielded results as is shown by the continued reliance on methods of production we wouldnt tolerate at home.

It lies somewhere in the middle, bit by bit, piece by piece. I think you will find that open markets tend to fare better in todays economy than closed ones, and certainly much more than in the past.

Posted by Bellevue Ave | June 29, 2007 3:20 PM
32

which is why we cant just rely on one sided approaches like "unionize!" without considering the consequences for that locale in unionizing?

nor can we say Free markets for the world while we hold them at arms length.

Posted by Bellevue Ave | June 29, 2007 3:26 PM
33

You also have to remember that we are not going to remain the #1 consumer of imported goods made by developing nations and dubious labor forever.

Posted by Bellevue Ave | June 29, 2007 4:28 PM

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