Globollocks, v2.0

by Daniel on January 16, 2004

Thanks very much to Michael Pollak, whose comments on the last Globollocks piece spurred me to make a few changes to this rather tiresome feature. Below, I score this piece by Nicholas “Airmiles” Kristof in the New York Times. The new scoring system is fairly self-explanatory; it’s based on the original Globollocks list, but it’s a bit more subjective rather than box-ticking, and you can now win points back for writing things that aren’t Globollocks.

Things that are Globollocks

“Sweatshop” as a category This may be a result of the short Op-Ed length, but Kristof says a number of things which seem outright weird. Is he trying to imply that construction workers want to get jobs doing stitching on shoes? What kind of toxic sweaters-o-doom might a garment factory be making that generate tons of effluent to dump into rivers? Or is Airmiles trying to suggest to us that “sweatshops” form a homogeneous class of capital assets? This matters, because labour standards are radically different in many industries, and the garment industry has a well-deserved reputation for being one of the worst. It also obviously matters because it makes a difference to the gender profile of industrialisation.
Points: 1 (it’s annoying rather than pernicious, and editing may be to blame)

The Smokey Mountain Myth This whole article is another version of a particular line of Globollocks argument that I trace back to this Krugman article. It’s basically an argument based on the implied assertion that there are no causes of unemployment in Third World countries other than protectionism. It’s not particularly coherent, to be honest, or even internally consistent. People scavenge on dumps because they have nothing better to do. This is because they are unemployed. However (as neoliberals are often keen to remind us when the context is the First World), trade policy does not actually have that much impact on the overall level of employment in a society; it can affect the level of income, but that’s not the same thing. It is not the case that Cambodia would achieve full employment overnight if its trade and labour policies changed to whatever prescription Airmiles is writing, so the fact that there are people scavenging on a dump in Phnom Penh is not actually something which can really be laid at the door of domestic protectionists. The idea that “jobs would be shifted” if this or that happened is a pure example of the lump-of-labour fallacy; Kristof would not say that “jobs were shifted” to Cambodia as a result of liberalisation and therefore shouldn’t make the symmetric claim.
Points: 5 (this is both an example of the “you just want to keep poor countries poor”, and an utterly spurious piece of economics)

Sweatshops that don’t sweat Kristof appears to make the assertion that it is possible to work in a shed full of sewing machines in a Southeast Asian country without perspiring. This is, to be honest, just bizarre. The problem here appears to be that his main quoted source for what conditions are like in factories is people who don’t work in them. He could, if he’d wanted to (and, IIRC, did, on his visit to Vietnam) compound the error by visiting the local Nike factory and taking it to be representative of the industry. Garment factories subcontracting for Nike, as a result of the highly successful company-specific campaign run against Nike in the 1990s, are in general very good at providing breaks, air-conditioning and a harassment-free environment for their workers. However, these improvements have not diffused to the rest of the industry at all, which is why the antiglobo lot place much less emphasis on company-specific campaigns these days.
Points: 3 (quite pernicious and quite misleading; Airmiles doesn’t appear to have done anything like the research needed to make such sweeping statements about labour conditions).

Is it great or not? The most annoying thing in this piece is that the actual economy of Cambodia doesn’t have a role in Kristof’s argument, other than as a provider of scenery. If Krugman were writing this article (or rather, when Krugman was writing almost exactly this article five years ago, linked above), he’d have made the argument that actually appears to be made here; that Cambodia’s labour standards and fair trade system cause unemployment to be higher, so they are responsible for people scavenging on dumps, so they are Bad Things. This argument is spurious, as argued above, but it’s at least an argument. Kristof, on the other hand, says “Cambodia has a fair trade system and promotes itself as an enlightened garment producer. That’s great.”, seemingly without realising that this has reversed the entire position he appeared to be arguing for. If Cambodia’s labour standards already meet the proposed minimum standards for trade, then you can’t use Cambodia as an example for why those minimum standards are a bad idea, unless you’re prepared to also criticise the Cambodians. At its root is one of the fundamental theorems of Globollocs; that the points of the antiglobo lobby are purely the opinions of the First World’s middle class. The reason why Airmiles gets into this logical convolution is that he wants to paint the issue as a black-and-white one of do-gooding Westerners attempting to impose their own standards (like the standard that it’s incredibly bad to have to scavenge rubbish?) on Third World countries where those standards aren’t appropriate. In conceding that the Cambodians at least, want exactly the protections that Gephardt wants for them, Kristof is giving away a lot of the rhetorical force of his argument
Points: 2, and I think I’m being lenient

“For the fundamental problem in the poor countries of Africa and Asia is not that sweatshops exploit too many workers; it’s that they don’t exploit enough” This ludicrous false dichotomy was presumably meant as a sonorous-sounding cliche rather than a serious piece of analysis, and will be scored as such
Points: 1

Things that aren’t Globollocks

Minimum labour standards are basically back-door tariffs: Of course they are, and it’s rather shameful for First World unions to support them, and Kristof is right to point this out.
Points: Positive 4.

Overall assessment: Net of the four points won back, Kristof scores eight Globollocks points for this one. I think that’s about right. The central argument (that minimum labour standards are disguised tariffs and bad for the Third World) is a decent one to make; I personally don’t think the case is conclusive, but it’s not actively bad. But the “product liability” aspect of Globollocks is important here I hold Kristol responsible not just for his central thesis, but for the cumulative effect on the debate of all the argumentation he uses in support of it. And this cumulative effect is quite bad. It’s not fair to portray all opponents of neoliberalism as not caring about the Third World; neither is it fair to portray them all as being ignorant either of conditions in Third World economies of of economic theory. And the Smokey Mountain Myth is one that really needs to be laid to rest. So, Kristof sets the benchmark for the new system (points probably not commensurable with the old one); 8 points is what you get for writing a pretty crapulous but basically well-intentioned piece of Globollocks. The nickname “Airmiles” has been awarded to him by me for cumulative lifetime achievement rather than for this specific piece, btw.

{ 63 comments }

1

Matthew 01.16.04 at 11:38 am

More Globbollocks!

Wait. I mean: More debunking of globbollocks, D^2!

2

Jack 01.16.04 at 12:45 pm

” it’s rather shameful for First World unions to support them”

Since when were unions supposed to be free trade? They all represent the self interest of fairly narrow groups. They have often fought hard to get their wages and working conditions, why would they give them up? The US steel unions were definitely in favour of steel tarriffs.

This is just another version of the lump of benefit fallacy. There are plenty of things that are better overall that are not better for everybody. Why should seamstresses in the first world in particular lose their benefits to seamstresses working in worse conditions? At least if they can avoid it.

Isn’t this the Smokey Mountain Myth in another guise?

3

dsquared 01.16.04 at 1:11 pm

Hmmmmm I suppose I forgot that US trade unions come from a different tradition. I always think of a trade union as a socialist institution, and was tutting over their failure to show solidarity with the working class of the world. Fair point.

4

david 01.16.04 at 1:35 pm

Yes, thanks, and more globollocks. I’m not sure Kristof gets to be “airmiles” if Friedman’s on the same page, though. At least Kristof gives a hint of leaving the airport. Friedman reads like he’s found a pudding box offer and just hops from place to place, yammering on his cellphone, racking up miles.

5

dsquared 01.16.04 at 2:15 pm

Hmmmm maybe we should have a competition to find a nickname for Friedman.

6

Jack 01.16.04 at 2:42 pm

I think it is case of push coming to shove. Taking such solidarity very seriously would have pretty radical implications, for wage bargaining for example.

7

digamma 01.16.04 at 2:44 pm

For what it’s worth, Kristof has a slideshow with audio commentary to go with this article, which you can watch here.

8

john s 01.16.04 at 2:50 pm

“Is he trying to imply that construction workers want to get jobs doing stitching on shoes?” No, he makes no such inference.

“What kind of toxic sweaters-o-doom might a garment factory be making that generate tons of effluent to dump into rivers?” I used to teach english in a Catalan town dominated by a generally upmarket clothing industry. Its river stank, was devoid of fish and changed (primary) colour daily.

“Or is Airmiles trying to suggest to us that “sweatshops” form a homogeneous class of capital assets?” No idea what that means.

“People scavenge on dumps because they have nothing better to do. This is because they are unemployed… trade policy does not actually have that much impact on the overall level of employment in a society” They are not unemployed, they are employed savenging on dumps. So, yes, trade policy may not have an impact on the overall level of employment in society, but it does have an impact on the quality of that employment. If Cambodia cannot trade unless its workers meet rich country standards, then it may not trade at all and all Cambodians will then be condemned to jobs like scavenging.

For that reason you are right when you write “It is not the case that Cambodia would achieve full employment overnight if its trade and labour policies changed to whatever prescription Airmiles is writing” because they already are at full employment.

But you are incorrect to add “the fact that there are people scavenging on a dump in Phnom Penh is not actually something which can really be laid at the door of domestic protectionists.” Some or all of them could be employed in a factory working in conditions which are awful by our standards, but are MUCH BETTER than scavenging in a dump.

“If Cambodia’s labour standards already meet the proposed minimum standards for trade, then you can’t use Cambodia as an example for why those minimum standards are a bad idea, unless you’re prepared to also criticise the Cambodians.” Your logic is faulty. Kristof’s article is asking the question “what would happen if the Democratic Presidential candidate frontrunners implemented their current views on labor, environmental and human rights standards in international agreements?” Cambodia provides an example of what would happen. All countries would be obliged to have standards like Cambodia’s and, as a result, they would have lots of people scavenging and the like.

“It’s not fair to portray all opponents of neoliberalism as not caring about the Third World”. He doesn’t. He’s making the point that caring so much that you insist the Third World adopts First World working conditions if they want to trade does not mean they will necessarily end up with First World working conditions. Rather, they may end up scavenging on dumps.

9

Jack 01.16.04 at 3:07 pm

John S.

The logic isn’t faulty is it? You can’t claim that Cambodia meets standards and would be hurt by forced to meet them. Now there may be another point but the contradiction remains and Mr. Kristof really needs to say it directly to make it.

The point d-squared made earlier in the article seems to have passed you by. While in agregate there is no question that free trade is beneficial, it is a small effect compared to whatever leads people to live on rubbish dumps. The Phillipines is by no means the most protectionist place aroound and still has the problem. It is simply not the case that the link is that direct. Possibly the increased growth and in a few cases new job opportunities would give the society the opportunity to organise itself more equitably but 1 per cent GDP growth is not going ot eliminate these problems.

Working in a factory, even in dreadful conditions might be better than living on a garbage mountain but that is not the choice offered.

Rather, opening trade is one small part, likely adopted by the guys getting other stuff right, that might help the overall situation a bit. Some countries have done without garbage mountain homes with no trade at all you know.

As for the last point, d-squared actually gives Kristof plus points for pointing out that working condition requirements have some of the effects of a tarriff. (of course the receipts are returned to the third world country unlike the steel case where the US government was the only substantial beneficiary)

10

Conrad barwa 01.16.04 at 3:26 pm

This may be a result of the short Op-Ed length, but Kristof says a number of things which seem outright weird. Is he trying to imply that construction workers want to get jobs doing stitching on shoes? What kind of toxic sweaters-o-doom might a garment factory be making that generate tons of effluent to dump into rivers? Or is Airmiles trying to suggest to us that “sweatshops” form a homogeneous class of capital assets? This matters, because labour standards are radically different in many industries, and the garment industry has a well-deserved reputation for being one of the worst. It also obviously matters because it makes a difference to the gender profile of industrialisation.

I assume he is using it as a short-hand for industries where capital would try to beef up profit margins by squeezing labour costs as much as is (in)humanly possible. Feminisation is also part of this as you point out.

This whole article is another version of a particular line of Globollocks argument that I trace back to this Krugman article.

I believe that Jeffrey Sachs also made a similar argument along the lines of “the problem with sweatshops is not that there are too many but that there aren’t enough”. Along with Krugman’s piece this is what is waved around a lot by the pro-Globalisation supporters.

It’s basically an argument based on the implied assertion that there are no causes of unemployment in Third World countries other than protectionism. It’s not particularly coherent, to be honest, or even internally consistent. People scavenge on dumps because they have nothing better to do. This is because they are unemployed. However (as neoliberals are often keen to remind us when the context is the First World), trade policy does not actually have that much impact on the overall level of employment in a society; it can affect the level of income, but that’s not the same thing.

I always thought that this kind of neo-liberal argument relied on some variant of WA Lewis theory of economic development with Unlimited supplies of labour; with the bit about ‘excess’ labour packed into the informal economy and sort of hanging around the organised sector trying to get in. The idea being that as long as capitalists can opportunities to do so, and can make profits from; they are more than willing to sally forth and set up vast numbers of factories to employ this ‘surplus’ labour. Needless to say, there are some problems with this, but the current neo-liberal version, I think marries this to the fact that all that is needed is for the animal spirits of these capitalists to be unleashed by abolsihing trade barriers and (usually) domestic state regulation. The famous ‘caged tiger’ metaphor so beloved in The Economist.

It is not the case that Cambodia would achieve full employment overnight if its trade and labour policies changed to whatever prescription Airmiles is writing, so the fact that there are people scavenging on a dump in Phnom Penh is not actually something which can really be laid at the door of domestic protectionists. The idea that “jobs would be shifted” if this or that happened is a pure example of the lump-of-labour fallacy; Kristof would not say that “jobs were shifted” to Cambodia as a result of liberalisation and therefore shouldn’t make the symmetric claim.

There is one sense where protectionists/ism can be said to be relevant here. Opening First World agricultural makrets and removing domestic subsidies here would certainly improve income opportunities in the small-holder agricultural sector of many LDCs and stem some of the push factors that lead to labour flows from small/peasant farm labour being driven out of this sector by cheap imports of subsidised agricultural products. The problem with the argument about domestic regulation of labour and trade laws; is that the most evaluations from the World Bank’s WDR seem to indicate as far as I am aware, that there is actually no clear link between real wages and growth in employment in traditional ‘sweatshop industries’ like apparal manufacture. This I think complicates matters a lot but does indicate that abysmal labour conditions on the cry of the need to maintain competitiveness does not exist to anywhere the extent that is asserted by Globalisation enthusiasts.

Sweatshops that don’t sweat Kristof appears to make the assertion that it is possible to work in a shed full of sewing machines in a Southeast Asian country without perspiring.

This is incredible; I don’t now enough about Cambodia but many SE countries have problems with this and those in South Asia, labour under what are really very poor conditions. Many abuses are non-perspitaroy in nature; corporal punishment and sexual abuse being two of the more lurid ones that come to mind. Having lived in the vicinity of one of these latter day dark mills, they are nowhere near as benign as some apparently think.

Is it great or not? The most annoying thing in this piece is that the actual economy of Cambodia doesn’t have a role in Kristof’s argument, other than as a provider of scenery.

Not all that surprising given that the main attention on Sweatshops has flared up over a period when exports from many LDCs have become more in the line of manufactures and Cambodia is not a primary source of this (as yet) so it is really a stand-in for other target countries.

I always think of a trade union as a socialist institution, and was tutting over their failure to show solidarity with the working class of the world.

To some degree, I would say this would be a bit idealistic even when applied to Europe these days – just look at the attitudes towards labour migration displayed by some here. Most TUs have become more particularistic in their concerns and where they haven’t they have been on the receiving end of labour-repressive policies to break their power for a couple of decades by now. Some LDC ones might meet this kind of standard better, like perhaps COSATU but many TUs are either the patronage vehicles for political parties or more concerned with their own jobs and to keep out unorganised labour from upsetting their entrenched priveleges.

11

john s 01.16.04 at 3:35 pm

Jack

The logic is faulty. Kristof doesn’t say that Cambodia would be hurt by being forced to meet fair trade standards. How can he? He’s the one who points out it already does. He mentions rather generally Africa and the poor countries of Asia as being areas which would be hurt. He is using Cambodia as an example to illustrate the problem posed by the policies advocated by some democrat candidates. It is a poor Asian country and voluntarily applies trade policies that the candidates would like to impose universally. Look what happens, he simply points out.

“While in agregate there is no question that free trade is beneficial, it is a small effect compared to whatever leads people to live on rubbish dumps.” Tell that to the Hong Kong Chinese. If they couldn’t trade they would turn to scavenging.

Look, imagine a country so poor that scavenging on dumps is preferable to subsistence farming in the country. Add enough factories to employ a quarter of the scavengers in conditions that are better than scavenging. Then insist on working conditions which make it not worthwhile for half of the factories to continue operation. Where do the workers laid off go? Probably back to the dump.

Of course free trade is not the answer to everything but it is more important than you give it credit for. The SE Asian tigers and Ireland managed substantially more than 1% annual GDP growth. In fact they managed nearly 10 times as much, a performance much due to exporting.

I can think of no countries that have prospered without trade. Arguably, the US has but that’s only because it’s massive, so most of its business is inevitably with itself. I can think of numerous egs of countries that have failed miserably by rejecting trade: Ceausescu’s Romania, Albania, North Korea. Cambodia and most Third World countries are not massive and do need export possibilities to grow.

12

GT 01.16.04 at 3:45 pm

Daniel,

I always look forward to your posts but you’ve lost me here.

I see nothing wrong with construction workers wanting to move to factories. That has been my personal experience. And the garment making process includes many toxic chemicals, particularly with the use of dyes so it seems perfectly reasonable to talk about tons of effluent.

On the Smokey Mountain Myth I don’t read it as you do. I don’t think Kristoff is saying that all employment problems would be resolved but certainly it would help some people. The point he is making (as Krugman before him) is that there aren’t that many other options for the garment workers.

Nor do I think that it’s a false dichotomy to say that more ‘sweatshops’ are needed.

13

dsquared 01.16.04 at 3:57 pm

I see nothing wrong with construction workers wanting to move to factories. That has been my personal experience

I was mocking him for switching back and forth between factories and garment workshops. In my experience of construction workers, the idea of someone with years on the sites being then able to do fine sewing-machine work is pretty silly.

And the garment making process includes many toxic chemicals, particularly with the use of dyes so it seems perfectly reasonable to talk about tons of effluent

But “sweatshops” aren’t dyeing factories. They’re places where garments are assembled by hand. Again, this fell into the category of knockabout abuse of Airmiles for not making it clear what he was talking about.

I don’t think Kristoff is saying that all employment problems would be resolved but certainly it would help some people.

If what happened? I read him as saying quite clearly that Gephardt et al are guilty of pursuing policies that put people on rubbish dumps.

I don’t see how you can fail to recognise that false dichotomy. It is possible to want more factories without wanting more sweatshops, because not all factories are sweatshops.

14

digamma 01.16.04 at 4:21 pm

It’s not fair to portray all opponents of neoliberalism as not caring about the Third World; neither is it fair to portray them all as being ignorant either of conditions in Third World economies of of economic theory.

OK, I propose an armistice. Let’s all agree to assume that, barring overwhelming evidence to the contrary, those with whom we disagree about economic issues….

1. care about the poor,
2. are aware of and sympathetic to their plight,
3. are aware of basic economic theory, and
4. have very little in common with the party that ran Germany from 1933 to 1945.

15

GT 01.16.04 at 4:40 pm

Daniel,

I accept that Kristoff’s article is not perfectly consistent. But I don’t expect that much in 700 word Op Eds.

What I take from this article is that what we in the rich nations may consider sweatshops are, by local standards, highly desirable jobs. Having lived in a not-so-rich nation that has been my experience. To me when Kristoff (or Krugman or Sachs) are saying we need more ‘sweatshops’ it does not mean they want more children exploited. Rather they recognize that bad as they may be ‘sweatshops’ are a step up from the alternatives which over time can evolve to even better jobs.

I understand there are a myriad of other policies (fiscal, regulatory, monetary) that interplay and that trading polcies by themselves won’t resolve the problems of poverty. I don’t think Kristoff would disagree with that either.

Maybe the guys digging ditches in Mexico City may not have the skills to join a maquiladora but (in my experience) they see it as a step up, in wages and job environment. If Gephardt managed to put in place policies that prohibited all ‘sweatshop’ work , yes, some people would end up looking for garbage.

16

phil 01.16.04 at 4:58 pm

Except perhaps for #4, those are some mighty big concessions you’re demanding. I’d be far more willing to concede that neither side cares about the poor than that both sides do.

17

dsquared 01.16.04 at 4:59 pm

But I don’t expect that much in 700 word Op Eds.

That op-ed is not so tightly worded that the necessary qualifications were squeezed out for lack of space. Kristof finds plenty of room to repeat himself and shoehorn in the local colour. I don’t like this excuse when Krugman uses it and Kristof has no excuse, being a professional journalist.

I noted that there is a genuine point here, but most of the rhetoric used is just poisoning the well and helping to confuse. Hence, Globollocks.

18

john s 01.16.04 at 5:06 pm

“I was mocking him for switching back and forth between factories and garment workshops.” He doesn’t.

“But “sweatshops” aren’t dyeing factories. They’re places where garments are assembled by hand.” I don’t think anyone uses sweatshop that precisely. It’s simply a sweeping term used to sneer at foreign multinationals located in the Third World.

“I read him as saying quite clearly that Gephardt et al are guilty of pursuing policies that put people on rubbish dumps.” You’re right – he is. And he’s right.

19

dsquared 01.16.04 at 5:11 pm

John, I’m right here. Have you ever seen the hands of someone who’s worked on construction sites for a few years? Now imagine a pair of those hands trying to thread a sewing machine. There is a big difference here, and it’s a gendered difference as well.

Furthermore, “sweatshops” has always had a specific meaning right back to the days when sweatshops were largely located in the First World and staffed for the most part by Jews. A sweatshop is a garment assembly workshop where workers and their sewing machines are put too close together with too little ventilation. The term was not invented five minutes ago by Naomi Klein.

I’ve explained above in the piece why it is very wrong to link tariff policy to rubbish dumps in the way Airmiles does it, and I don’t feel like repeating myself.

20

Steve Carr 01.16.04 at 5:19 pm

The argument for which Kristof has been awarded the most Globollocks points is the “Smoky Mountain Myth” argument. But, as John pointed out, I think we need some more evidence that this is really a myth: that is, that production for export is not crucial to improving living conditions in developing nations. Again, the people on the smoking mountain are not, as Daniel says they are, “unemployed.” They’re working scavenging stuff off the mountain, and are presumably paid for this work somehow (or else they wouldn’t do it). Daniel himself argues that “trade policy can affect the level of income,” which is the thrust of the Krugman/Sachs argument against minimum labor standards: people whose scavenging jobs pay them little will get factory jobs that pay them more. This may be empirically wrong, but it is not incoherent or inconsistent.

I also have a hard time believing that the “minimum standards” the Democratic candidates have in mind are met by even Cambodia.

21

john s 01.16.04 at 5:22 pm

D-squared,

“John, I’m right here. Have you ever seen the hands of someone who’s worked on construction sites for a few years?”

So what? Kristof DOES NOT say that they could or should or want to move to a garment factory. He said “factory”, nothing more specific.

“Furthermore, “sweatshops” has always had a specific meaning right back to the days when sweatshops were largely located in the First World and staffed for the most part by Jews.”

Just because that’s how you interpret it does not mean that that’s how Kristof is using it. I certainly didn’t imagine that he was referring only to garment assembly workshops staffed almost entirely by Jews. If we must be that specific, are there any sweatshops at all in Cambodia? I think he was using sweatshop in the way Naomi Klein would recognise.

“I’ve explained above in the piece why it is very wrong to link tariff policy to rubbish dumps in the way Airmiles does it, and I don’t feel like repeating myself.”

Yes, and I read your piece and posted a response earlier. You obviously haven’t read my response but I didn’t feel like repeating myself either.

22

Chirag Kasbekar 01.16.04 at 5:35 pm

dsquared,

Once again, a little unfair (but thought provoking).

For one, Kristof doesn’t really say that globalisation/trade is going to directly and overnight lift people off the garbage dumps (a scene that is extremely commonplace here in India, BTW) or that protectionism is causing it. His point seems to simply be that the ‘sweatshops’ are a step forward (thus, the quotes from all the people outside dreaming about getting in) not back as the anti-globos claim.

[I think he’s largely right (though there surely would be some globalisation-fed horrors). When even governmental contract workers here in my country work in appalling conditions — scrawny men and women hammering away at rocks all day in the sun to dig up roads, for instance (the kind of thing I think he meant when he said the sweatshops were relatively sweatless) — I’ll take anything that looks like a step forward.]

That we need to be careful about anything at the international level moves us back — even if international labour standards aren’t being met — though perhaps Cambodia is meeting them, Africa may not be.

Which is not to say that activists should let up pressure on corporations. Hammer them by all means. No need to be anti-globalisation.

“I don’t see how you can fail to recognise that false dichotomy. It is possible to want more factories without wanting more sweatshops, because not all factories are sweatshops.”

All this turns on what the definition of a sweatshop is. Anything that doesn’t meet standards met in the West?

I personally won’t oppose international labour standards if they can be devised in such a way that there isn’t a withdrawal of those factories — those factories are better than nothing.

But how would an international minimum wage be implemented? Would you have pressure on governments as well?

And can ‘Airmiles’ call you ‘Armchair’?

Awaiting enlightenment. Honestly.

23

dsquared 01.16.04 at 5:41 pm

His point seems to simply be that the ‘sweatshops’ are a step forward (thus, the quotes from all the people outside dreaming about getting in) not back as the anti-globos claim.

I don’t accept this; if this were true, why all the stuff about the Democratic candidates? He also uses the phrase “jobs would shift to Malaysia or Mexico”, which is a very specific economic argument.

As I say above, a sweatshop is an always has been a sewing machine workshop with workers too close together and insufficient ventilation. The first screen of Google results for the word “sweatshop” seems to confirm me in my belief that I am not mad.

24

robin green 01.16.04 at 5:41 pm

Sorry if I sound like the village idiot here, but can someone (perhaps dsquared?) please explain to me why global labour standards would be bad? Either via international treaty or via US import restrictions, say. It seems to me that poorer countries would still have an advantage over the US due to their lower costs of living, even if labour standards were normalised (in supply chains selling to countries with labour standards import restrictions, at least).

25

Jack 01.16.04 at 5:46 pm

John,

I see your Hong Kong and raise you Singapore, which does trade but has also been plenty protective, as has Malaysia. Hong Kong is a difficult case because if it wasn’t for trade it wouldn’t be there at all so it is not a great role model. If it was asked to do its fair share of farming it would be in deep trouble.

The problem about determining the positive effects of trade is the strong correlation between those doing the other stuff right and those doing trade right. Not only are there likely to be two good stories at the same time, doing the right things at home almost certainly helps in reaping the benefits of free trade. We are agreed that free trade is probably mostly a good thing, we are agreed that it is not everything, where we disagree is in whether or not it is a panacea. The result of this disagreement is that in coming to a basket case country, you would start by abolishing international trade barriers whereas I might start by reforming the legal system or monetary and tax policy. Doing that effectively might require trade reforms but if it doesn’t we would be ready when it was done.

In any case it takes two to tango and it is an unfortunate problem that poor countries are often quite agrarian so internal policy might be somewhat moot. In any case if there are strong reasons to have a common agricultural policy say in rich Europe, how much more compelling might be the arguments in poor Mexico say.

I just don’t think that international free trade is a magic wand. Bosnia has very free trade (on its side — it can’t levy tarrifs on EU food for example) and a fat lot of good it has done so far.

As far as the work standards thing goes the logic is fine but I agree that Kristof is actually criticising Cambodia for preventing school age children from working in factories. That opens a whole other can of worms though. I am surprised that 17 year olds are too young to work. It’s OK for 16 year olds to work in the UK.

In any case I suspect that there are not so many people living on the garbage heap and without some numbers the story is basically an anecdote that fits a story that he probably arrived with. I could very quickly find people almost as desperate in London and argue that we needed more investment banks to give them homes.

26

john s 01.16.04 at 5:48 pm

D-squared:

“I don’t accept this; if this were true, why all the stuff about the Democratic candidates?”

Because they promise to put an “emphasis on labor, environmental and human rights standards in international agreements” if they are elected – which would spell the end for sweatshops (whether narrowly or widely defined)

27

john s 01.16.04 at 5:56 pm

Jack,

” see your Hong Kong and raise you Singapore, which does trade but has also been plenty protective, as has Malaysia.”

I haven’t been saying that Cambodia should be free trade and nor does Kristof. He is worrying about US protectionism only and so am I.

“Doing the right things at home almost certainly helps in reaping the benefits of free trade.”

I completely agree with you.

On the other hand, doing the right things at home is also insufficient if you can’t access rich country markets.

28

john s 01.16.04 at 6:02 pm

Robin Green

Somehow I don’t think dsquared is your man if you want to know “why global labour standards would be bad”.

Imagine you wanted to get a job as a cook but the government passes legislation saying noone is allowed to cook for a living unless they are at least as good as Gordon Ramsay. How many employed cooks do you think there would be?

That is the effect of global labour standards.

29

Jason McCullough 01.16.04 at 6:05 pm

“Of course free trade is not the answer to everything but it is more important than you give it credit for. The SE Asian tigers and Ireland managed substantially more than 1% annual GDP growth. In fact they managed nearly 10 times as much, a performance much due to exporting.”

The Asian Tigers also did it by sheltering their domestic markets like no one’s business, so I’m not sure that it’s as relevant as you think. Ireland, of course, is completely irrelevant, being a first-world country.

“Again, the people on the smoking mountain are not, as Daniel says they are, “unemployed.””

So I take it that homeless guys in the first world are “employed”? This is silly.

30

john s 01.16.04 at 6:24 pm

Jason

“The Asian Tigers also did it by sheltering their domestic markets like no one’s business, so I’m not sure that it’s as relevant as you think.”

Kristof isn’t arguing for free trade (and nor was I). He was simply arguing against US protectionism.

“Ireland, of course, is completely irrelevant, being a first-world country.”

Thanks to having achieved 10%+ growth rate every year for a decade. You think a country can grow like that just because it’s first world? Tell that to the Germans or the Japanese.

““Again, the people on the smoking mountain are not, as Daniel says they are, “unemployed.”” So I take it that homeless guys in the first world are “employed”? This is silly.”

Having criticised me for mixing what you call a first world economy with third world ones, it’s ironic you do exactly the same thing.

Just because you don’t receive a monthly salary from ICI or Nike or the government, it doesn’t mean you are unemployed.

31

john s 01.16.04 at 6:29 pm

Jason

““Again, the people on the smoking mountain are not, as Daniel says they are, “unemployed.”” So I take it that homeless guys in the first world are “employed”? This is silly.”

Whereas calling someone unemployed when they are scavenging for a living on a dump for over 12 hours a day is perfectly rational?

32

robin green 01.16.04 at 6:55 pm

John – Please cite an example of a global labour standard that anyone serious is actually advocating that would have a similar effect to your chef example, and explain why.

33

Matthew 01.16.04 at 7:04 pm

The neo-liberal trade regime creates a race to the bottom regarding labor standards, which leads to immense suffering in the “sweatshops” (wether people knit/perspire in them or not is irrelevant). If we raised the bottom to which we force poor countries to race towards, that does not mean that a lump sum of benefit would be transferred away from the first world…
Or rather the problem here is “how much?”. Everyone here is arguing over dichotomies.
Could we agree that anywhere, a dollar made through the grinding of a few young women is not worth making? Would the people on the rubbish pile mind that much?

34

Jack 01.16.04 at 7:26 pm

I think Kristof does suggest that Cambodia is shooting itself in the foot by enforcing high workplace standards.

I’m with you in thinking that developed world protectionism can be damaging but as a point of history somebody managed to get rich without a rich country to trade with.

I think the employment status of the scavengers is a bit of a red herring. On the one hand they are not a burden on the state, on the other I imagine they would welcome an alternative opportunity. On the third hand they probably don’t have much time to look for alternatives and on the fourth these people are possibly pathological cases even by Cambodian standards. Take your pick but the point is that market forces alone are not going to change their life anytime soon and free trade on its own will take a long while to have a significant impact.

35

jw mason 01.16.04 at 7:26 pm

I’m still confused about why it’s shameful for American unions to support labor standards. Presumably if workers in poor countries could make the decision colelctively, they would choose a somewhat higher level of wages, and lower level of employment, than the free trade outcome. Why is this same result bad when it’s the result of trade policy?

And for what it’s worth, I’m entirely certain that American labor leaders believe they are acting in solidarity with workers in poor countries by supporting labor standards, as well as acting in their own interest.

(And what’s so wrong about 1st-world unions defending their members’ interests, if there’s no other mechanism in place to compensate the losers from trade?)

36

Jack 01.16.04 at 7:28 pm

After:
I think Kristof does suggest that Cambodia is shooting itself in the foot by enforcing high workplace standards.

I forgot to add that if that is so it can’t also be a criticism of US policy because if the US does introduce labour standard rules, Cambodia will actually be ahead of the game.

37

Jack 01.16.04 at 7:44 pm

jw mason
cui bono?

What happens if labor standard rules are brought in?

Third world workers
Positives:
Better working conditions in work involving export to the US
Negatives: Loss of jobs. No protection in new opportunities.

US union members:
Positives:
Foreign competition more expensive so more jobs.
Negatives:
None

“Some of you will lose your jobs, but that’s a sacrifice we are willing to make”

38

john s 01.16.04 at 7:56 pm

Robin

“John – Please cite an example of a global labour standard that anyone serious is actually advocating that would have a similar effect to your chef example, and explain why.”

It doesn’t matter whether anyone is seriously advocating something similar. I was using Gordon Ramsay as an extreme to make a point.

Try another example. Maybe you want to get a job with the police. They have some height below which you cannot be if you want a job with them. It may only be 5 foot 2 and you probably make it, but some people won’t. What will certainly not happen is that everyone will suddenly become at least 5 foot 2.

And that’s all Kristof is saying. Introduce labour standards and some factories in poor countries will close, forcing the employees of those factories into a much worse situation.

Jack

“I’m with you in thinking that developed world protectionism can be damaging but as a point of history somebody managed to get rich without a rich country to trade with.”

No country in history has grown as fast as the Asian tigers who managed it because they had very rich countries to export to. Countries trying to get rich in the C18 and C19 didn’t have anywhere so rich to export to.

“the point is that market forces alone are not going to change their life anytime soon and free trade on its own will take a long while to have a significant impact.”

I agree, but I do think US protectionism could quickly worsen their situation. After all, that is the history of the Great Depression.

“I forgot to add that if that is so it can’t also be a criticism of US policy because if the US does introduce labour standard rules, Cambodia will actually be ahead of the game.”

No, no. Imagine you cut off your leg. Then a US presidential candidate advocates that some people should cut off a leg. Along comes Kristof who criticises this because of the terrible effect it will have, using you to illustrate why. He can criticise the candidate even though he is only advocating what you have already done.

39

jw mason 01.16.04 at 8:02 pm

Jack,

Why do you assume that

Positives: Better working conditions in work involving export to the US
Negatives: Loss of jobs.

adds up to a net negative for third world workers?

It seems pretty clear to me that for some appropriate level of labor standards, it must add up to a net positive. Just imagine a single monopoly supplier of third-world labor. If it wanted to maximize its total income, would it supply labor above, at, or below the competitive level?

40

jw mason 01.16.04 at 8:19 pm

John S:

US protectionism could quickly worsen their situation. After all, that is the history of the Great Depression.

Now this is just false. Devaluation and tariffs were not the “beggar-thy-bneighbor” of myht but a totally appropriate response to the Depression and ameliorated rather than exacerbated the downturn. That’s because their main function was to open up space for expansionary policy domestically, not improve th etrade position in itself. Expansionary policy — monetary or fiscal — was necessary, but impossible as long as it would result in balance of payment problems. So as long as you couldn’t solve the coordination problem involved in many countries reflation simultaneously, tariffs were necessary to allow countries to undertake them individually.

41

Jack 01.16.04 at 8:24 pm

John. S

but Cambodian jobs won’t go anywhere as a result.

I’m trying to suggest that your interpretation is a bit on the charitable side.

If he was making your point, he could have done so more clearly. As it is I think it comes across as anti do-gooder rather than anti-protectionist. Sort of “Naomi Campbell is objectively pro living on garbage heaps” rather than “selfish Americans condemn Cambodians to live on garbage heaps”. The actions may be the same but the former lets you buy Nikes in peace, the latter is probably a harder sell.

BTW the Nike example is an interesting one. It still manufactures in thid world countries even though it has upgraded its working conditions. If working conditions were eliminated as an arena of competition there is a chance that some competitive advantage would be lost by very poor countries but mostly the cost would be born by first world countries. Since typically manufacturing costs are tiny compared to retail prices the contraction of the international sport shoe market say would be very small. The labor standards issue simply means that third world workers are on a chase to the bottom. Maybe we need a world labor standards organisation? Seems as practical as WIPO say.

42

Chirag Kasbekar 01.16.04 at 8:25 pm

Chirag: “His point seems to simply be that the ‘sweatshops’ are a step forward (thus, the quotes from all the people outside dreaming about getting in) not back as the anti-globos claim.”

Daniel: “I don’t accept this; if this were true, why all the stuff about the Democratic candidates? He also uses the phrase “jobs would shift to Malaysia or Mexico”, which is a very specific economic argument.”

If you see the slideshow, for instance, you’ll see clearly that the reason he mentions the garbage pickers and the constructions workers is mainly to put the sweatshop jobs into context.

In the slideshow he says something like: “The critique of the sweatshop jobs is basically right, and they are pretty wretched jobs. But here in Cambodia it’s also clear that they are, for many poor workers, among the best opportunities they have. There are a lor jobs in third world countries that are much, much worse.” (He goes on to cite the two examples he gives in the article.)

And look, he clearly isn’t saying that “Gephardt et al are guilty of pursuing policies that put people on rubbish dumps”.

He’s merely saying that given how horrible other jobs are, if international labour standards lead to the withdrawal of the sweatshops, one set of opportunities to move up in life would disappear.

You might disagree whether this will happen, of course.

Daniel: As I say above, a sweatshop is an always has been a sewing machine workshop with workers too close together and insufficient ventilation.

My trusty WordWeb informs me that sweatshop means this:

Factory where workers do piecework for poor pay and are prevented from forming unions; common in the clothing industry.

And clearly Klein, Gephardt, et al mean all manner of things by sweatshop. So when you respond to them you can be excused if you use it loosely, no?

43

Chirag Kasbekar 01.16.04 at 8:27 pm

Daniel: If Cambodia’s labour standards already meet the proposed minimum standards for trade, then you can’t use Cambodia as an example for why those minimum standards are a bad idea, unless you’re prepared to also criticise the Cambodians.

But does Kristof really say that ‘Cambodia’s labour standards already meet the proposed minimum standards for trade’?

Do they?

44

john s 01.16.04 at 8:32 pm

JW

“Now this is just false. Devaluation and tariffs were not the “beggar-thy-bneighbor” of myht but a totally appropriate response to the Depression and ameliorated rather than exacerbated the downturn.”

So the US has a stock market crash in 1929 to which it responds with devaluation and tariffs. Soon after, the rest of the developed world is in depression too. This is just coincidence and nothing to do with beggar thy neighbour policies? I’m unconvinced.

45

Jack 01.16.04 at 8:35 pm

jw mason

Why do you assume it leads to a net positive?

My reply was just to illustrate the point.

I don’t actually know that it leads to a net negative (did you read my first post above?) but I’m not willing to presume it doesn’t and certainly not to believe that the no-risk option for the US guys will be fair or even the overall optimal solution.

I would only be really happy if the third world guys had a say too, accountability is the key.

Oh and make that Naomi Klein in the previous post.

46

jw mason 01.16.04 at 8:35 pm

I’m unconvinced.

Well, we’re not going to settle this here. But the story you tell is not the only or most compelling one. A good alternative is represented by barry Eichengreen — I recommend “Golden Fetters.”

47

jw mason 01.16.04 at 8:41 pm

jack,

I don’t assume it — I offered an argument. The price of third-world labor which maximizes the total income of third-world workers is above the free-market level. In just the same way, and for the same reason, that the price of oil that maximizes the income of oil-producing countries is above the free market level. unlike OPEC countries, suppliers of third world labor lack the insitutions to make a cartel effective. but they can in principle achieve the same result thru appropriate labor standards.

Yes, labor standards also benefit first-world workers. I can’t see why that’s an argument against them.

48

Steve Carr 01.16.04 at 9:08 pm

The question is not what maximizes the income of developing-country workers in the short term, but rather what will insure the continued flow of investment in the long term, assuming that investment and GDP growth (and therefore improvement in living standards) have something to do with each other.

What’s peculiar about this argument is that we have had a natural experiment in the form of the original Asian Tigers and the later NICs. None of them followed global labor or environmental standards. All of them enjoyed rapid — perhaps even unprecedentedly rapid — growth. More important, in all of them the wages and living standards of average workers rose sharply over time (or did, at least, until the currency crises of 1998). Of course there are myriad counterfactuals one can offer, and manufacture for export was not the only reason for the success of these countries. But does anyone here really believe that South Korean workers would have been better off in 2002 if South Korea had been forced to obey global labor and environmental standards in 1962?

49

Jack 01.16.04 at 9:14 pm

I’m not arguing against them except insofar as my original illustration is true.

I even outlined circumstances where they might work well. But it matters who sets them and what they are and what they apply to.

I think there is some cant talked about labor standards by unions. Labor standards are not a platonic form, they can be written in all sorts of ways and are not all appropriate in all places. Just because one set of labor standards might benefit third world workers you can’t deduce that what’s left over for third world workers from a different scheme designed to have no negative consequences for first world workers will be positive, let alone fair.

Unions can behave like medieval guilds sometimes.

To take you argument head on. It might be true that some appropriate level of labor standards is beneficial overall for all workers in boht the third and first worlds and by some reasonable measure.

However it does not follow that a scheme set by the US will be too.

50

Jack 01.16.04 at 9:26 pm

I think my Farquuad paraphrase sums the argument up well. There is a good reason to be suspicious of people with plans where you are the one that makes all the sacrifices.

Steve, that and the observation that living standards in the first world were no always so great is the reason why there is an issue.

However there have been so many failures to emulate the success of the tigers (Who are the later NICs exactly?) by merely aping the most obvious macroeconomic epiphenomena of these stories that there is no obvious reason to assume that lightning will strike again, especially when China and India can combine the advantages the tigers exploited with mercantilist muscle. Surely we would have at least one success story in Africa if it was that simple. It’s a bit like thinking that I could drive like Michael Schumacher just by making sure that I was at wheel of a Ferrari.

51

jw mason 01.16.04 at 10:44 pm

jack:

It might be true that some appropriate level of labor standards is beneficial overall for all workers in boht the third and first worlds and by some reasonable measure.

However it does not follow that a scheme set by the US will be too.

I agree with this, and in fact almost everything you’ve posted. I’m actually much more abivalent onthis subject than my comments here. It’s very arguable that, in practice, the best trade policy the US could follow, from the point of workers in poor countries, is to remove all trade barriers of all kinds — and of course Daniel is right that labor standards are a kind of trade barrier.

Two big caveats to this: Unlike most commenters here, I think the interest of first-world workers in protection is perfectly legitimate and needs to be accomodated to some degree; and, even if liberalization in rich countries helps workers in poor countries, liberalization in the poor countries themselves does not.

52

Jason McCullough 01.16.04 at 11:17 pm

A guy living on the street in NYC who sells scavenged cans for a living is no more “employed” than his equivalent in the third world, unless you think their potential productivity is equivalent to what they get from scavenging.

“But does anyone here really believe that South Korean workers would have been better off in 2002 if South Korea had been forced to obey global labor and environmental standards in 1962?”

Maybe, maybe not. Another interesting equestion is “would SK workers have been better off in 1962.”

53

Jack 01.16.04 at 11:25 pm

To me the the Globollocks thing is s symptom of people insufficiently wary of simple solutions to complex problems and mistaking the helpful for the miraculous, and the most subtle intellectual error, misprioritising solutions. I think that liberalisation in poor countries will probably end up being a good idea but international trade is not always the place to start. I’m with you on the first world workers too but imagine that the right balance is rarely struck and they either get no protection or salary weighted consideration.

When the only tool you’ve got is the ability to put a cart before a horse, all problems look like a missed opportunity to grow GDP.

54

Barry 01.16.04 at 11:27 pm

“What’s peculiar about this argument is that we have had a natural experiment in the form of the original Asian Tigers and the later NICs. None of them followed global labor or environmental standards. All of them enjoyed rapid — perhaps even unprecedentedly rapid — growth.”

IIRC, these countries were also highly mercantile. They had (and have) massive government subsidies of ‘desirable’ industries. They had very, very little use for the free trade/free market/neoliberal/Chicago School theories, except as those theories granted them access to export markets.

I don’t think that the Asian Tigers are useful for supporting neoliberalism, unless one is willing to ignore most of what they did, or to handwave it away.

55

robin green 01.16.04 at 11:35 pm

Liberalisation: I’m not sure that liberalisation of US agriculture is an achievable goal, given (a) the large corporate interests involved, (b) the importance of agriculture to national security, (c) most fundamentally, the fact that free markets don’t do very well at agriculture!

Labour standards: It seems to me that a number of the arguments against labour standards here have been against straw men. Of course it is the case that big unilateral labour standards improvements will temporarily raise prices (albeit slightly) and put a country at a competitive disadvantage, other things being equal. This is completely bleedin obvious.

That is precisely why I think it is up to the rich buyers to enforce standards on all their imports whichever country they come from – and in particular, because I believe laws are there precisely to enforce morality (although it does not follow that all moralities must be enforced by laws) – I believe it is a very appropriate role for the state to enforce minimum labour standards on sellers.

Yes, there will be closures and openings of factories. But factories scraping the bottom of the barrel standards-wise are always under threat of competition, pretty much – unless they’re based in somewhere like the torturing state of Burma, perhaps.

The question is, would the short-term dislocations engendered by minimum labour standards import rules forever lock some countries out of their export markets? And the answer is, of course not.

56

John S 01.17.04 at 12:07 am

JW Mason

After reading around about the Great Depression I totally admit that I overdid the trade barrier explanation. However, trade barriers, monetary contraction and devaluation all had the same effect on US imports in the 1930s as raising global labour standards today would – they cut US demand for imports. That contributed a lot to hardship in the rest of the world then. It would today too.

“I don’t assume it — I offered an argument. The price of third-world labor which maximizes the total income of third-world workers is above the free-market level. In just the same way, and for the same reason, that the price of oil that maximizes the income of oil-producing countries is above the free market level. unlike OPEC countries, suppliers of third world labor lack the insitutions to make a cartel effective. but they can in principle achieve the same result thru appropriate labor standards.”

This is true, but would also mean far less employment in third world countries, which is what Kristof is arguing. Fine if you’re in one of the nice factories, scavenging on a dump if you’re not.

Jack

“Surely we would have at least one success story in Africa if it was that simple.”

Botswana? Whoops, dsquared gives globollocks points for mention of diamond-rich Botswana. Still, I’ve always thought he disrespects Botswana. Sierra Leone, Angola, Nigeria … are all very resource rich African countries which have not matched Botswana’s growth record. Diamonds help, but they’re not enough. Domestic policies are crucial too.

Jason

“A guy living on the street in NYC who sells scavenged cans for a living is no more “employed” than his equivalent in the third world, unless you think their potential productivity is equivalent to what they get from scavenging.”

I disagree with you, but let’s return to what dsquared argues and, for argument, I’ll accept that anyone scavenging on a dump is unemployed. Dsquared argues that US trade policy has no impact on Cambodian employment. Think about that. Consider, for example, a US ban on any imports from Cambodia. Dsquared is arguing that this would have no impact on the number of people employed in Cambodia. One day, booming export industry. Next day nothing. Impact on employment: nil. Is that plausible?

“Maybe, maybe not. Another interesting equestion is “would SK workers have been better off in 1962.””

Some yes. Others no.

Barry

“They had very, very little use for the free trade/free market/neoliberal/Chicago School theories, except as those theories granted them access to export markets.

I don’t think that the Asian Tigers are useful for supporting neoliberalism, unless one is willing to ignore most of what they did, or to handwave it away.”

This is a straw man. Kristof is only concerned about access to export markets (specifically the US). He says nothing about what Cambodia should do about imports.

57

John S 01.17.04 at 12:27 am

Robin

“Labour standards: It seems to me that a number of the arguments against labour standards here have been against straw men. Of course it is the case that big unilateral labour standards improvements will temporarily raise prices (albeit slightly) and put a country at a competitive disadvantage, other things being equal. This is completely bleedin obvious.”

Can you explain why it is obvious that big labour standard improvements will only temporarily raise prices and only slightly? If fast food outlets are obliged to pay their staff one hundred times more than they are paid now, this will only temporarily raise burger prices? And only slightly?

“The question is, would the short-term dislocations engendered by minimum labour standards import rules forever lock some countries out of their export markets? And the answer is, of course not.”

The euro has appreciated substantially against the dollar and European exporters hard cannot sell profitably into the US anymore. This is equivalent to the cost raising impact of increasing labour standards. Noone I know is arguing for European exporters to grin and bear it because, even if the euro goes on up, somehow things will get easier for them to export to the US.

By the way, rigged agriculture markets aren’t much good either.

58

Jack 01.17.04 at 2:34 am

It’s not disrespect for Botswana, it is just that the lessons learned by a nation of 1.5million people and rich with diamonds and tourism are not close to universal. It is not that Botswana is not deserving of respect, possibly quite the opposite. It is just that it didn’t get where it is by following a simple recipe that would work for lots of other places.

In any case this is all getting a bit confusing. Kristof is criticising socially concerned protective measures on the part of the US. D-squared says they are not such a big deal So why are we talking about what countries can and can’t do for themselves?

59

Jason McCullough 01.17.04 at 8:14 pm

“Dsquared is arguing that this would have no impact on the number of people employed in Cambodia. One day, booming export industry. Next day nothing. Impact on employment: nil. Is that plausible?”

Depends how big the export market is. I think he’s arguing that removing tariffs on Cambodia wouldn’t improve Cambodian employment, though, which isn’t symmetrical for a variety of reasons.

On obvious practical grounds, Cambodia’s export earnings are 2.3 billion annually, GDP 19.7 billion (Googled up). Marginal changes to 11.6% of the economy isn’t going to fix Cambodian unemployment any more than it would in the US.

60

andrew 01.18.04 at 3:55 am

Great post, Mr. Squared.

More Globaloney, and more D^2 posts in general, please. Thank you. :)

61

john s 01.18.04 at 8:24 am

Jason

“Depends how big the export market is.”

True, but the US is a massive export market.

“Marginal changes to 11.6% of the economy isn’t going to fix Cambodian unemployment any more than it would in the US.”

Sure, but I don’t see that as an argument to care less when the US (or the EU for that matter) threatens trade barriers against third world countries. That will put more people in dump scavenging “unemployment”.

62

dsquared 01.19.04 at 6:48 am

As it happens, I was reading a book about my second-favourite period of UK history over the weekend. It’s amusing to note how many of the arguments of the kind “raising labour standards will close down the factories and send the poor into horrible scavenging”, are nearly word-for-word copies of similar arguments made in the 1830s against the child labour laws passed in England. They were wrong then …

63

robin green 01.19.04 at 10:05 pm

John – instead of “temporarily”, I should have said “perhaps only temporarily”. As for slight price rises, I’m referring to the economics of sweatshop production, where the amount paid to the sweatshop labourers per item is a tiny fraction of the amount they eventually get sold for. So, it would only mean slight price rises in that sense. Sorry if that wasn’t clear.

As for the euro comparison, I still think you aren’t getting it. I’m talking about imposing the same standards on all countries exporting to a country, which would mean that those where the cost of providing decent conditions is lowest (certain poorer countries) would be at the best advantage, as opposed to now, when those who provide better conditions have (other things being equal) a competitive disadvantage, which is what you seem to be alluding to, so you seem to be alluding to the problems with the exact opposite of my proposal, namely the status quo.

I’m glad we are in so much agreement, although you don’t seem to notice it.

As an aside, some factors which are considered in the US as employee benefits, such as health insurance, are something of a special case and not something that I think should be included in labour standards – health insurance should be provided by the state, in my view.

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