Of, By, And For the Common Man

New at Reason: In an interview with Nick Gillespie, Johan Norberg, the author of In Defense of Global Capitalism, explains why international free trade, open markets and cultural mongrelization are good for the poor.

Comments

[green]

Joe,

Agreed. Sweatshop opponents like myself call for a living wage, worker safety, the right to organize without company or state retaliation, and better working conditions.

[ed]

"...the right to organize without company or state retaliation..."

Green,

Do those rights extend to the other humans in the equation: the property owners? Do they have a right to hire and fire who they please, without union or state retaliation?

[Eric Hanneken]

green, safety comes in degrees; it's not something you either have or don't have. I'd like to have more safety and better conditions where I work, too, but I'm not willing to sacrifice any more of my wages for them. At this point, I value a dollar more than the improvement it would buy me. If some third party decided to force my employer to raise the standards of our work environment, I wouldn't appreciate that because it work make me worse off, and it would narrow my choices. Is there a reason why employees in other countries wouldn't feel the same way?

[Shane]

They should be free from state retaliation, but not from a union walkout.

[joe]

Eric, it doesn't make any sense to compare your working conditions, wages, and safety with the situations that exist in sweatshops in developing countries. A better comparison would be to look at textile workers in America circa 1870-1920. A great deal of worker safety, minimum wage, child labor, and right to organize protections were imposed on their employers by the government, and I defy you to produce a shred of evidence that these regulations stunted America's economic growth over the subsequent decades.

[shane]

If you have to reach back to the 19th and early 20th centuries are you saying we should abolish all subsequent regualtions since then?

I love when leftists grab the old 19th century regs out of their back pocket as proof that all regulations do not impose costs on businesses.

[mak_nas]

joe, i would agree that unions were the (hard-won) compromise that saved capitalism. and i've no doubt that third-world workers will have them.

the question, it seems to me, is whether or not western governments and agencies (in our wisdom?) should be meddling with these nations to force these changes on them, possibly prematurely. unions rose in the us decades into our capitalistic economic development -- a case could be made that a premature/forced adoption of a welfare state would deprive these developing nations of a period of exploitation that was, as painful as it was, extremely productive. after all, growth runs at 7% and higher in these economies largely because costs are very low.

i would think it wiser to stay neutral and out of the way. we do too much well-intentioned but catastrophic meddling as it is.

[Eric Hanneken]

joe,

I don't believe I did compare my working conditions to anyone else's. I didn't even specify what my working conditions were. The points I'm trying to make are

1. There is no such thing as a free lunch. Better working conditions mean lower wages.

2. The right balance between wages and good conditions depends on the individual; there is no one-size-fits-all standard that is best for everyone.

3. Each individual worker is in the best position to know what his values are, and thus which package of wages and working conditions best suits him.

[Eric Hanneken]

"Better working conditions mean lower wages."

I forgot to qualify that with "all else being equal." Obviously, increases in productivity allow better working conditions without lower wages.

[Rick Barton]

green @2:03 PM:

"(I) call for a living wage, worker safety, the right to organize without company or state retaliation, and better working conditions."

In his book, Norberg documents the huge improvement in working and living standards (often better than just a "living wage" that you hope for them) realized by folks in the third world when their governments relinquish the control over the economies and allow the people to travel the capitalist road.

Get the book. Norberg observes the things you call for coming true in spades! Were talking a real betterment of the human condition and a marked reduction of suffering here. We know what works now. We have to endeavor to keep the trend toward economic freedom going in the third world and not let it be wrecked by agencies of international governance such as the IMF, World Bank and the WTO.
Also, I just read the Stromberg piece that Kevin Carson cited @ 12:05PM It's very good as well.

Merry Christmas everyone!

[shane]

Wow. Excellent comments Kevin.

They cannot have it both ways.

That's why the greens fail. They claim to support decentralization, yet support nationalisation of industry?

[joe]

"I love when leftists grab the old 19th century regs out of their back pocket as proof that all regulations do not impose costs on businesses."

I never claimed any such thing. What I claimed was that the conditions imposed on manufacturing businesses by unions and government during the early/middle stages of industrial capitalism (minimum wages, worker safety, etc) created benefits far beyond their costs - as demonstrated by the raging success of our manufacturing sector during that period.

mak, the footloose globalization of capital these days and the reduction in the costs that get sunk into establishing a new manufacturing enterprise in the developing world changes the equation somewhat. A textile manufacturer in New England in the 1900s couldn't just pack up and move if his employees got too uppity, the way his modern counterpart operating a sweatshop in Hondorus can do today. Though your warning about well intentioned meddling is entirely appropriate.

Kevin, blocking WTO and bi-lateral agreements related to workers' rights won't eliminate state interference in the labor markets of developing nations. It would just guarantee that all of the state interference is going to keeping the boot firmly on the workers' necks, and none is going to lifting it off. Plus, the footloose nature of modern capital means that even if a level playing field did allow workers to make some gains, the owners could just pack up for some other nation where the government doesn't have so many scruples about assassinating union organizers.

[Jason Ligon]

There are two different arguments on the table:

1) Is an authoritarian regime good for development?

2) What is the position Nike should take regarding laborers who are working under authoritarian regimes?

No one in these parts is really disputing the answer to 1.

Focusing on 2, I don't really understand the idea that it is better for laborers under authoritarian regimes to have no higher paying jobs than to have jobs that pay better than local alternatives.

The whole 'living wage' concept is bogus. People are living on less than what they are earning at 'sweat shops'. The only fair wage is one determined by offer and acceptance of the parties involved, any other wage IS some variation of wanting air conditioned offices, it is a completely arbitrary number that would have the effect of destroying jobs. Minimum wage in our country has the same effect, but we have enough productivity enhancing technology that we are only destroying very low paying jobs. In the third world, you would be destroying every productive job not least because any technology has to be brought in and maintained at a cost that would not be recouped given higer wages.

Right to organize can mean all sorts of things, but I certainly would take issue with the idea that unions can stop working and prevent the company from hiring anyone else, but a company doesn't have the option of not dealing with a union in the first place. The cost of union contracts are borne by a great many people, and one has but to look at the west coast port strike to come up with an idea of how much cost this can be.

Kevin makes me wonder why so many people went to the cities in the US Industrial Revolution in lieu of staying on their presumably productive farms. In the pastoral libertarian view, no one would voluntarily make such a decision. Conditions were bad in factories, but they were worse on the farm because people were starving due to the low prices they could get for their goods.

[joe]

Shane and Rick make the mistake of conflating central planning/nationalization of industry with the promulgation of regulations governing workers' welfare. The experience of Russia, China, and Cuba in the late 20th century demonstrates that the former is a path to failure. The experience of America and Western Europe in the late 19th and early 20th century demonstrates that the latter is in no way incompatible with a burgeoning, vital industrial sector and an overall advancement in economic well being. Which is why I can both celebrate the tremendous advancement in human well-being brought about by globalization and promote "a living wage, worker safety, the right to organize without company or state retaliation, and better working conditions" for those employed by TNCs. Please note the complete absence of evidence that such impositions on the sacred property rights of robber barons stifled America's economic growth during the period that we rose to become the world's foremost economic power.

But the libertoids raise a lot of good points, especially in regards to our protectionist industrial union brothers. Let's face it, green, it's more important to have 8 developing world peasants join the working class than one American worker continue to earn a 21st century middle class paycheck for performing 1950s-era tasks, rather than take a few classes at the community college and find a new job.

[joe]

"I don't really understand the idea that it is better for laborers under authoritarian regimes to have no higher paying jobs than to have jobs that pay better than local alternatives."

That's a false dichotomy. The cost of building and operating a factory in Hondorus is so much lower than doing the same thing in the US that the competitive advantage sought by employers exists without having to shave off costs by refusing to buy safety guards for the machines, paying less than the laughably tiny living wage in Hondorus, and letting line workers have a pee break without losing their jobs.

Unlike some industrial unions, I have no problem with American companies going overseas to take advantage of the lower costs of doing business there - as long as they operate ethically. But the human cost of preventable industrial accidents, for example, dwarfs the tiny profit margin gained by letting them happen.

[mak_nas]

the footloose nature of modern capital means that even if a level playing field did allow workers to make some gains, the owners could just pack up for some other nation where the government doesn't have so many scruples about assassinating union organizers.

is this bad? ultimately, the worst problem with american unions has been that their power to monopolize entire industries is essentially unchecked -- with the result of killing off entire industries with their greed (see steel, and soon carmakers, here).

no one seriously advocates backing authroitarian regimes. but the mobility of capital should ensure that, when unions in developing nations grow too powerful (as in the us and europe today), their drag is minimized and nations in greater need (and therefore willing to accept less in wages) benefit.

this is a global equalizing force, it seems to me, and a benefit -- not something to be feared.

[shane]

*note to self*

*joe @ 3:39 pm used robber barron buzzword*

*marked for reference*

Let me just write your posts joe. LOL.

19th century workers rights regulations, robber barrons, etc.

Geesh, join this century and stop using leftist catch phrases.

And no I'm not confusing nationalisation and/or a command economy with the rise of universal provision in the West.

One is transparently terrible, while the other bears substantial hidden costs via democratic legislation.

[joe]

mak, the steel industry was not killed off by unions, but by the fact that paying Americans to manufacture steel makes very little sense. Even without unions, the amount of money you'd have to pay people to work in steel mills makes the cost of keeping the plant here too high to be competitive.

And auto manufacturing isn't going anywhere.

Shane, most people would recognize that there is a teeny bit of parody in the phrase "the sacred property rights of robber barons." But I guess you're "special."

[shane]

SELF-parody perhaps.

😉

[joe]

"'the owners could just pack up for some other nation where the government doesn't have so many scruples about assassinating union organizers.'

is this bad?"

I thought libertarians were opposed to the government using force to distort markets. I guess that's not so when the market in question is the toil of people who work for a living.

I don't know if you noticed, but you didn't defend moving operations to take advantage of lower costs resulting from a freer market. You defended moving operations to take advantage of lower costs resulting from the use of violence against people seeking to engage in negotiation over a contract.

[shane]

You have shown everyone who posts here is not a libertarian joe.

[Kevin Carson]

joe,

The boot on workers' necks could be alleviated considerably by the CIA and SOA (or WHISC, or whatever) ceasing to prop up authoritarian regimes.

And I've got no problem whatsoever with attempts by radical unions like the Wobs and WSA (or even the AFL-CIO, for that matter) backing organizing efforts and political activism in foreign countries. As it is, the AFL-CIO plays a big role, through the National Endowment for Democracy, in encouraging labor docility in those countries. I've also got no problem with sympathy strikes by U.S. workers over the use of raw materials, unfinished products, cargo, etc., from authoritarian regimes. Likewise consumer boycotts of such products. American working people need to stop seeing their relations with their Third World counterparts as a zero-sum game, and start seeing them as allies in a war against a common enemy.

And as far as I'm concerned, all the moral strictures against the use of violence by labor here in the U.S. go right out the window in a regime where the boss is in direct collusion with the jackboots. Even in the most authoritarian workplace, there are a hundred different ways workers can monkey-wrench the production process, individually or collectively. Workers in countries like Red China should be encouraged to do just that by their fellow workers in the U.S. Anyone in doubt about the effectiveness of this should check out the CIA sabotage manual for the Contras (and read the Wobbly pamphlet "How to Fire Your Boss).

"Conditions were bad in factories, but they were worse on the farm because people were starving due to the low prices they could get for their goods."
--Jason Ligon

But what was the context of those low prices? The state-subsidized (damn near state-created) railroads, and the money system, might have had something to do with the structure of the markets in which farmers sold their produce.

[Andrew]

I am kinda divided on this. I have problems with buying products of outright slave labor...and China, with more than 50 million imprisoned poses that problem. But I'm a fan of prison captalism in the US.
I really don't know what to think about child labor. Nepalese kids might starve without some kind of useful employment: "When we get a union around here...we're out of work."

Free unionism-- even on the most minimal and libertarian definition-- simply isn't going to pertain to Red China. You might hope to filter out their prison industries (lotsa luck). Unless you think the time is otherwise right to impose a trade embargo on the People's Republic (for some reason), then this is just a blind stumbling into one, short of regime change in Peking.

I like a strong presumption of free trade, with exceptions. Central America likely wouldn't make the cut for me.

[Jason Ligon]

joe:

"But the human cost of preventable industrial accidents, for example, dwarfs the tiny profit margin gained by letting them happen."

I agree here, but all I see is a party offering a job at above prevailing wages that someone is willing to take or not. If there were mass graves outside the factory in Honduras, I don't think folks would choose to work there. My feeling is that most of the work being done in the factories is less hazardous than the work being done in the fields. I also think that many people simply assume that the lack of OSHA in Honduras means that every factory is a death trap.

[Jason Ligon]

Kevin Carson:

"But what was the context of those low prices? The state-subsidized (damn near state-created) railroads, and the money system, might have had something to do with the structure of the markets in which farmers sold their produce."

It might have, but that can cut both ways. Farmers got more customers. I continue to scratch my head at your love affair with inefficiency. No doubt the government distorted things by injecting itself into the construction of the railroads, but it seems odd to hope that no roads would ever be built to protect the margins of farmers.

[Kevin Carson]

"But you?ve got to compare things with the alternatives that people actually have in their own countries. The reason why their workplace standards and wages are generally lower is the lack of productivity, the lack of infrastructure, the lack of machinery, and so on...."

This reminds me of the boilerplate apologies for working conditions in the Industrial Revolution that I've seen at Ideas on Liberty: the "dark satanic mills" were better than the available alternatives. The problem is, those alternatives didn't exist in a vacuum. The ruling oligarchy of England played the biggest role in making sure there WAS no alternative but to sell one's labor on the bosses' terms. They did this by robbing the overwhelming majority of the people of land that was rightfully theirs, on which they might otherwise have been able to subsist; by the Combination Laws; by Pitt's police state; by the Laws of Settlement, which prohibited working people from leaving their parishes in search of better wages; by selling off the resulting surplus labor from overpopulated parishes on a virtual slave market to industrialists in Manchester and Glasgow; and etc., etc., etc.

The alternatives available in the present-day Third World, by and large, are similarly restricted by authoritarian governments. And the TNCs that hire sweatshop labor (not to mention the CIA and School of the Americas) have a history of close cooperation with such authoritarian regimes. There's a REASON sweatshops have traditionally been located in countries with death squads, or where labor organizers are institutionalized in mental hospitals.

For anyone who wants to contrast the genuine free trade of Cobden with the neoliberal system, I strongly recommend Joseph Stromberg's, "Free Trade, Mercantilism and Empire" http://www.antiwar.com/stromberg/s022800.html

[mak_nas]

kc, knowing that you are not advocating bush-style regime changes for all offending lands, i would posit that the best available mechanism for upsetting this order is importing as much of our labor from those places as possible. i agree that the meddling of many governments can and does repress these people -- but, over time, the flow of capital to these places WILL upset the standing social order in spite of all else. and i think the best examples of such lie in se asia, where representative government is now following on the heels of the asian tigers' massive decade of development. places like south korea are not far removed in time from totalitarianism, and their progress can, i think, be directly linked to the infusion of foreign capital.

[joe]

People calling for better working conditions and fairer wages in the developing world are not, as Norberg pretends, calling for "air conditioned offices" and "First World wages." His refusal to engage with the actual arguments of his opponents puts up a red flag for me.

[joe]

Jason, a drowning man will grab even the blade of a sword. You don't believe the workers on a coffee plantation or Dole banana plantation are operating in a free market, do you? You remind me of the kid in a playground scrap who lands a good right and knocks his opponent down, then says "OK, let's not fight" when he sees hime getting up, angry.

[Jason Ligon]

joe:

Dole didn't land the right, and I certainly didn't (I'm a southpaw). Someone else landed the right, and we a are arguing about the nature of the assistance that is given to them by a third party after the fact. I don't see anything inherently wrong with offering a position to a consenting adult as long as no one is engaging in fraud to close the deal.

I don't think they are operating in a free market, but I do think they have choices. I absolutely abhor the idea of someone using police to march workers into a banana plantation, but there are no suggestions on the table to get a free market. You don't know what a 'reasonable wage is', whether or not there is a free labor market. A good way to free up the labor market is to have several companies in a country competing for the labor pool by making them offers.

[mak_nas]

I thought libertarians were opposed to the government using force to distort markets. I guess that's not so when the market in question is the toil of people who work for a living.

jesus, man, read the rest of the post, will you?the part wehre i say:

no one seriously advocates backing authroitarian regimes. but the mobility of capital should ensure that, when unions in developing nations grow too powerful (as in the us and europe today), their drag is minimized and nations in greater need (and therefore willing to accept less in wages) benefit.

this is a global equalizing force, it seems to me, and a benefit -- not something to be feared.

can you describe for me how this is a pro-government-interventionist view?

You defended moving operations to take advantage of lower costs resulting from the use of violence against people...

the problem with religious people is that thy assume that everyone else is evil. do you seriously think i or any reasonable person advocates this? i left unsaid that such things are bad because i trusted you to be able to understand that i am not a bastard because we don't have identical views.

i now see that trust in a minimum level of understanding and intelligent discourse from you as opposed to religious crusading and smearing is completely misplaced.

[joe]

Dude, look at the quote I took from your post. You asked if it wasn't a good thing for companies to be able to go to countries where the government drove down wages by using violence, at the behest of companies, to prevent workers from organizing. That's pretty fucking cold.

"can you describe for me how this is a pro-government-interventionist view?" Yes, I can. The grotesquely low wages in places like El Salvador and Hondorus are at those levels because of centuries of government violence, expropriation of land, and disruption of local communities. The governments/ruling families in most of the countries where these new factories are being located are depending on these artifically low wage levels to attract American companies (as they have for a century), and many are willing to use the same tactics to make sure the wages remain artificially low.

You know, there is an actual road to serfdom. It has been travelled by the majority of people in many, many Latin American countries. And, in the real world, it is not caused by workers winning the right to be treated humanely and ethically. It is caused by the opposite.

[mak_nas]

That's pretty fucking cold.

no, joe, you took the most vicious possible interpretation of my comments, ignoring that normal people don't advocate repressionary stalinist slaughter, pretended that i could only be talking about killing people as being good and that your literalist interpretation was the only thing i could have meant. i'm sorry that i thought i could conserve words and that you might understand by doing otherwise. that is frankly the type of thought process i ascribe to extremely narrow-minded fundamentalists who need to demonize their "enemy" more than understand anyone -- and that is why i will give your future comments very little credence until you example for me that you are something other than an unthinking zealot.

and still, despite what i've said, i'm sure you still know you're right in thinking me a bloodthirsty madman who feels people need to be killed to work cheaply. what else am i to assume when you obviously believe i disagree with this:

And, in the real world, it is not caused by workers winning the right to be treated humanely and ethically. It is caused by the opposite.

do you seriously think anyone disagrees with this? how old are you? ah, never mind -- too young, in any case.

[joe]

So you didn't actually mean to write that you supported using violence to drive down wages. Fine, you should have pointed out your mistake a lot earlier.

But I think it's a telling mistake; that the benefits of chasing cheaper labor were so important, that you didn't even notice, when reading and responding to the post, that the cheaper labor was the consequence of widespread government violence being carried out on behalf of landowners and American corporations, who were the successors to slaveowners. I never thought you were deliberately advocating for that sort of oppression (as opposed to you; you do seem to think I consider people on the other side of the argument to be pro-death squad). I thought that you were doing in your argument what a lot of conservatives do in their business and political practices; overlook what should be a huge distinction.

[Bush Daniel Harry]

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