Tim Worstall

Bibi van der Zee

There are times when I despair, I really do. The world appears to be full of idiots. As a solution to sweatshop workers earning a pittance we actually get this suggestion:

…buy second-hand clothes...

Yup, really, the solution to people labouring in poverty is to make sure that they don’t labour in destitution.

And campaigners in this area seem to agree that the only way to get the
big companies to change at this point is regulation and legislation. If
we are depending just on voluntary codes and self-regulation, it is
going to be slow progress.

Does this woman actually live upon the same planet as the rest of us? Regulation and legislation? Mandating that other countries adopt our legislation, well, it’s been tried before:

There is of course a historical
parallel from 19th century India, when as one economic historian has put
it, there was an agitation against the newly developed Indian textile industry
by "ignorant English philanthropists and grasping English manufactures"
who petitioned the Secretary of State for India "to apply British factory
legislation en bloc to India so as to neutralize the ‘unfair’ advantages
which the Indian mill industry was enjoying because of its large scale
employment of child labour and long hours of work". The Factory Acts of
the 1880’s were the result, which to this day continue to hobble Indian
industry. Plus ca change!

We also have a much more recent example of what can be done in the absence of such legislation and regulation:

Since 1998 wages have gone up by no less than 14% a year, while
export prices have fallen. The explanation is that productivity has
grown even faster than wages, expanding by 20% a year in industry,
cutting unit labour costs.

It is very difficult to think of anything at all that could be done,
outside letting the market rip, that would raise the worker’s wages by
14% year on year.

If you want to make poor people richer the answer is not to burden them with all of the regulations that we ourselves have, it is simply to buy the damn things the poor make. Why is that so tough for people to understand?
 

In

6 responses

  1. sanbikinoriaon Avatar
    sanbikinoriaon

    Because buying stuff made with child labour is kinda repulsive, that’s why. We’d much rather the kids were in school where, yes, they would not be being economically active, but would be learning useful stuff for later life, and having a childhood. Why is that so tough for people to understand??
    Tim adds: The problem being that currently the children would not be in school. They’d be in another, lower paid, job.

    Reply
  2. sanbikinoriaon Avatar
    sanbikinoriaon

    Yes of course. Because at no point does the utility of schooling outweigh the utility of increasingly tiny wages for them.

    Reply
  3. Chris Avatar
    Chris

    >Yup, really, the solution to people labouring in poverty is to make sure that they don’t labour in destitution.
    Is there a superfluous ‘don’t’ in that sentence?

    Reply
  4. chris strange Avatar
    chris strange

    sanbikinoriaon you are assuming that the automatic other option is schooling. In the type of country that we are talking about it isn’t, the kids are in work because they have to be in order to get enough money to eat. Throw them out of one job and they will just have to find another one that will inevitably have a lower wage (because if it didn’t they would already be doing that).
    As the economy grows there will come a point where school does become the other option as there are enough resources around that the family can pay for it and still put food on the table. At that point child labour will naturally decrease, but the economy has to grow first with the best method of getting that growth being to trade.

    Reply
  5. sanbikinoriaon Avatar
    sanbikinoriaon

    Tim is assuming that the automatic other option is a lower-paying job. You’re assuming that children working is the only way to increase the amount of money coming into the family. Neither of these are necessarily true.
    If everyone refused to buy goods made with child labour, will that result in all children being poorer? Perhaps, but perhaps the demand for their parents’ labour will increase, and their parents’ wages will increase.

    Reply
  6. Martin Avatar
    Martin

    Boobtubes for fat women could be made by 40 year old machinists in Darwen as opposed to 12 year olds in Dhaka and the clothing retailers would still make a profit on the same price they charge now.
    But they don’t want to do that; so because we now worship ‘business’ as if it were a religion and ‘businesspeople’ as if they were demigods, they are permitted to arbitrage the cost of labour between Lancashire and Bangladesh. This decreases their costs and increases their profits – however, it also means they’re being subsidised by child labour and ripping off their customers.
    That is the entire foundation of China’s so-called economic miracle.
    The global labour arbitrage is justified by the more economistic economic theorists on the basis of ‘free trade’; however their interpretation of comparative advantage is extremely selective. If a UK clothing retailer has a factory in Bangladesh, the profits that unit generates are not retained but exported – what overall advantage does Bangladesh gain from its presence?
    A reduction in its chronic child poverty problem? Not really – the kids remain as illiterate at the end of each shift as they are at its start. Once they’re turned out on the street when their fingers get too big, or the circus moves on somewhere else where the labour is even cheaper, not being able to read or write isn’t going to be much use to them then.
    Back they’ll go to begging and whoring.
    How does that ‘increase the total sum of human happiness’?
    Not much, I think.
    What incentive does it give Bangladesh to get its head out its backside and turn itself into a working country? None, as far as I can see.
    As Digby Jones told the CBI in 2004, we have nothing to fear from globalisation if we skill ourselves – he should have preached that message to the Bangladeshis.
    Personally, I get round such ethical problems as those suffered by Bibi van der Zee by not buying new clothes at all.

    Reply

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