Development Economics

Bangladeshi Workers Need Free Markets

The corporatist status quo and Western condescension are toxic.

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Since November, more than a thousand Bangladeshi garment workers have perished in two tragic factory calamities: a fire in Tazreen and a building collapse in Savar, outside the capital, Dhaka. Bangladesh is a major exporter of apparel to the West and "is set to become the world's largest apparel exporter over the next few years," the Economist reports. Wages are lower there than most places, including China, and a large percentage of the 4 million garment workers are women.

aftab. / photo on flickr

Are dangerous factories the price of progress? A passionate debate now rages over whether international safety standards should be enforced against manufacturers in the developing world and their Western retailers. Proponents of standards argue that the costs would be small and the benefits great. An Accord on Fire and Building Safety has been signed by major retailers in Europe and a few in North America, but the Huffington Post says that 14 other North American retailers have refused to endorse it.  "Some retailers, like Walmart, claim they are working on separate initiatives to improve conditions and workplace safety in Bangladesh," the online publication states, but this claim has been met with skepticism.

Opponents of government regulation argue that artificially raising the costs of manufacturing in poor countries would harm intended beneficiaries by destroying jobs. If so, workers would face worse options, including life on the streets and prostitution.

Unfortunately, the debate is unnecessarily narrow. What needs discussing — and radical changing — is the country's political-economic system, which benefits elites while keeping the mass of people down. The economists are correct that under the status quo, imposing safety standards would raise costs, cause unemployment, and aggravate poverty. But we can't leave the matter there. We must go on to examine how the political-economic system constricts people's employment opportunities, including self-employment, and otherwise stifles their efforts to improve their lives. Thus, a debate over whether garment factories should be subject to safety regulations, while the status quo goes largely undisturbed, misses the point.

According to a report (PDF) written for the Netherlands ministry of foreign affairs, most Bangladeshis, unsurprisingly, are victimized by a land system that has long benefited the rural and urban elites. "Land-grabbing of both rural and urban land by domestic actors is a problem in Bangladesh," the report states.

Wealthy and influential people have encroached on public lands…, often with help of officials in land-administration and management departments. Among other examples, hundreds of housing companies in urban areas have started to demarcate their project area using pillars and signboard before receiving titles. They use local musclemen with guns and occupy local administrations, including the police. Most of the time, land owners feel obliged to sell their productive resources to the companies at a price inferior to market value. Civil servants within the government support these companies and receive some plot of land in exchange.

Women suffer most because of the patriarchy supported by the political system. "Women in Bangladesh rarely have equal property rights and rarely hold title to land," the report notes. "Social and customary practices effectively exclude women from direct access to land."

As a result,

Many of the rural poor in Bangladesh are landless, have only small plots of land, are depending on tenancy, or sharecropping. Moreover, tenure insecurity is high due to outdated and unfair laws and policies…. These growing rural inequalities and instability also generate migration to towns, increasing the rates of urban poverty.

Much as in Britain after the Enclosures, urban migration swells the ranks of workers, allowing employers to take advantage of them. Since Bangladesh does not have a free-market economy, starting a business is mired in regulatory red tape — and worse, such as "intellectual property" law — that benefit the elite while stifling the chance for poor individuals to find alternatives to factory work. (The owner of the Savar factory, Mohammed Sohel Rana, got rich in a system where, the Guardian writes, "politics and business are closely connected, corruption is rife, and the gap between rich and poor continues to grow.") Moreover, until the factory collapse, garment workers could not organize without employer permission.

Crony capitalism deprives Bangladeshis of property rights, freedom of exchange, and therefore work options. The people need neither the corporatist status quo nor Western condescension. They need radical land reform and freed markets.

This article originally appeared at FFF.org 

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  1. Wealthy and influential people have encroached on public lands

    I see that as a positive honestly….

    So I was away for about two months (out of country) and only came back a couple weeks ago.

    Whatever happened to that Australian kid who was posting as 34lbs?

    Oh, and, FIRSTIES!

    1. Wasn’t 34lbs one of MS’s creations or someone else’s sockpuppet?

      1. Don’t think so. I thought he was legit. Young, naive with much to learn, but apparently willing.

      2. I don’t know, I suspected it was a troll when it first started posting, I didn’t figure Stack into it though, too sane and not obsessed with John for that. It seemed genuine through the last several interactions with it.

        I don’t know why it hit me, but I thought of him this morning for whatever reason.

        1. Lot of people not around. Sloop, Groovus…

          I has a sad.

          1. Sloopy was around the other day.

            1. I think Sloopy moved or something and hasn’t been on often because of that.

              He took a few weeks off, but I’ve seen him around the last couple of days.

        2. The sudden reply to every comment in the thread appearance seemed like her M.O.

    2. Honestly, it depends on how they encroach. If it never was in private hands, then sure highest bidder is fine. If it is like TVA, where the land was taken by force and coercion from proper deed holders, then highest bidder is not a moral solution at all.

      Most of the time, land owners feel obliged to sell their productive resources to the companies at a price inferior to market value.

      How do they know the “market value” if there were no competitive bids to begin with?

  2. Five Undercover Police Cars Sent To Arrest Single Alleged Movie Pirate

    “This morning I was arrested at my home under suspicion of recording and distributing Fast and Furious 6 and a few other titles,” the arrested man told TorrentFreak.

    I blame Suderman and his effusively positive review of F&F 6.

    1. You don’t see this behavior from the Into Darkness crowd.

    1. Come on. Someone else wrote that and you stuck Krugnut’s name on it.

      I will give credit where do. Good article Paul. (and may god have mercy on my soul.)

      Now, if he would only rethink the rest of his positions.

    2. To get a taste of moral outrage against globalization, turn to Corporate Watch, a site dedicated to exposing the “greed” of transnational giants.

      It really is amazing that he used to write stuff like this.

      1. Yeah, either:

        a) he had a stroke that permanently lowered his mental abilities

        b) he’s sold out for mega bucks and the last 13 years (or so) have been extremely elaborate performance art.

        1. I think that as he slowly got less coherent and more of a Team Blue sycophant he got more and more popular, and it just spiraled into the monster we see today. Remember, back in the nineties, no one really knew who he was. Now he’s a liberal demigod.

          1. His “textbook economics” quip is still number one on the Krugman’s greatest hits album.

        2. He got a taste for commie graduate student strange. Had to mend his ways or else go without.

  3. Women suffer most because of the patriarchy…

    What about the minorities???

    1. Forget it VG, it’s Sheldontown.

    2. Crony capitalism deprives Bangladeshis of property rights, freedom of exchange, and therefore work options.

      The majority of Bangladeshis are a minority, of course.

      This article isn’t any different than a dozen or more articles written by Thomas Sowell over the last 20 years concerning the fact that the lack of property rights and rule of law and predictable government in many parts of the Third World is what keeps them in poverty. Who in their right mind is going to invest in a project without clear title to the land and a pretty good idea that their investment isn’t simply going to be expropriated by the government any time it feels like it?

      Of course, it’s funny to be talking about this in terms of what is going on in Bangladesh – ever try to build a factory in the United States? How clear is the title to your land if environmentalists and preservationists in conjunction with local zoning boards and god-knows-how-many government agencies can keep your proposed land use tied up in bureaucratic limbo for years? How solid is the rule of law when nobody knows what tax laws are going to look like next year? How different is Bangladesh from the United States?

      1. Well, I don’t think we’re quite at the Bangladeshi level of government corruption, but I can see your fear.

        And this is something progressives don’t understand that you rightfully point out: as a business/property owner, either you play the rent-seeking game, or you forfeit all that you own. Why is it surprising that developing countries can’t reach “developed” status when their governments operate as a criminal organization?

        1. Ask the Hooker Chemical Company just where we were on the scale decades ago. I don’t see anything improving.

        2. I don’t think we’re quite at the Bangladeshi level

          I agree – but I think we are approaching each other from opposite directions.

          And it’s not really ‘corruption’ so much as it is simply the failure to believe in spontaneous market order, the belief that ‘somebody’ has to be in charge of things. If it’s not government controlling the markets, then obviously it’s going to be those evil, greedy corporations controlling the market. It’s simply not possible that the market runs itself.

          (Which really isn’t much different than the basis for a belief in God when you think about – things just can’t possibly exist just because, somebody has to be running the show. For a certain type of person, faith in the god of government goodness and the devil of corporate evil is a pretty close parallel to religion.)

          1. Yeah, the proggies are economic creationists.

            1. And regardless of what Shreek will spew all over the place, economic creationists are far more dangerous to liberty than religious creationists.

      2. Actually often times the “rule of law” is in direct conflict with property rights.

  4. This article reads like a description of Britain’s evolution to capitalism in the 18th & 19th centuries. Has any country moved towards free market capitalism without a crony capitalist phase? The United States probably had the least, but still heavy, amount.

  5. Wait a minute…. This is from the Future of Freedom Foundation? Then shouldn’t we really be blaming Israel for what’s happening in Bangladesh? It doesn’t have to make sense.

    Not that it matters (articles like this aren’t really posted to promote libertarian education), but who exactly would be in charge of this “land reform?” Oh. Yeah.

    So what did we learn today? That countries without property rights, the rule of law, and secure contracts tend to suck. Thank you great and wise teacher!

  6. What Bangladesh needs is to watch the new season of Arrested Development. That should solve quite a bit.

  7. What they need to do is let their concrete cure for the full 30 days. I think it was last year a parking garage in Atlantic City collapsed. This is in a state with probably the most oppressive building codes in the country, and it was union labor. The problem was, they didn’t know how to use a calender.

    1. NEEDZ MOAR REEBAR!!!11!

    2. Last year, or 2003?

      http://www.cnn.com/2003/US/Nor……collapse/

      1. Why not both?

        Since pancaking was involved, someone alert the truthers and Alex Jones.

      2. Fuck. Was it that long ago?

        Getting old sucks!

        1. Looks like NJ is having them every decade now.

    1. The stupidity…it burns!

    2. Don’t forget Haiti was also a libertarian paradise after the earthquake in 2010. “Why, they didn’t have any building codes doncha know?!”

    3. Haha, on the second article an error message appeared at the top of the screen:

      Warning: Invalid argument supplied for foreach() in /home/content/…

      Appropriate.

    4. It’s just one of those Libertarian paradises. Oops. Here is a description of the countries currently most influential political party:

      The Bangladesh Awami League styles itself as the leader of the “pro-liberation” forces in Bangladesh, promoting secular and social democratic sections of the political establishment in the country. The party constitution states, and in two cases defines the reason for, four fundamental principles in guiding its philosophy and policies.[3] They include:

      Democracy
      Socialism, establishing an exploitation-free society and social justice
      Secularism, non-communal politics and separation of religion and public life
      Atheism

      The four principles are similar to those of the original Four State Principles in Bangladesh’s constitution which included nationalism, secularity, democracy and socialism.

      Before the 2008 general elections in Bangladesh, the Awami League announced in its manifesto, its “Vision 2021” and “Digital Bangladesh” action plans to transform Bangladesh into a fast-developing middle-income country by 2021.[4] The party uses the term “Shonar Bangla”, or golden Bengal, to describe its

      IOW, it’s a social democracy, the hallmark of progressivism.

      Fucking retards who posted that shit that was linked to.

      1. The four principles are similar to those of the original Four State Principles in Bangladesh’s constitution which included nationalism, secularity, democracy and socialism.

        So, the National Socialist Bangladeshi Worker’s Party?

    5. Although Bangladesh has recorded significant increases in economic freedom over the past five years, economic development remains hampered by the fragile rule of law. Corruption and marginal enforcement of property rights have driven people and enterprises out of the formal sector. Poor economic management, worsened by repeated political crises, has severely constrained economic dynamism and exacerbated persistent poverty.

      World rank in economic freedom: 132

      Oh yeah. Libertarian paradise.

      http://www.heritage.org/index/country/bangladesh

  8. Has anyone seen this yet?

    If this is what the future of this country looks like, we are surely more doomed than previously thought.

    1. Don’t worry, little snowflake is still a victim of having to listen to her whiney ass, clueless, overly entitlement minded mom.

      Maybe she’ll meet a nice libertarian guy when she grows up and realize that mom is a wacko.

      My granddaughter is 2 months old now. I still got lots of time to work on that kid. By the time she’s 5 she’ll be wearing a monocle, employing the other pre-schoolers in her textile mill for minimum wage, and calling her parents proglodytes.

      1. You’re not doing your job right if she’s employing them for the wealth sapping salary of minimum wage.

    2. Restricting people’s ability to choose is all the progressives know how to do.

    3. That petulant, self-righteous, whininess is understandable, and has probably always been rather typical, in 9-year-olds. The problem is that less and less people grow out of this phase.

      It’s barely tolerable when a 9-year-old does it. It’s ridiculous when a 45-year-old does it.

      1. No doubt the mom wrote the daughter’s message and, you could say, brainwashed her to think a certain way.

        1. No doubt the mom talks in the same petulant, whiny voice about ‘fairness’.

          Brainwashed in the context of kids doesn’t really make sense, IMHO. Kids are naturally going to mirror their parents value system at nine. As teenagers they are going to naturally rebel (to a larger or lesser extent) against that value system. Parents can help sow the seeds of true independent thought, of course, but those seeds need germinate on their own.

          1. I worry about an age where the rebellion of teenagers in regards to their parents belief systems will become more and more of the cultural revolution type.

            Sure mommy and daddy are statists, but they weren’t really serious about it, to the camps with ’em!

  9. What Bangladeshi Workers Need

    Our jerbz?

  10. Moreover, until the factory collapse, garment workers could not organize without employer permission.

    You had me until this line, Richman. Why shouldn’t employers have every right to forbid employees from unionizing as a condition of employment?

    1. They should be able to organize. But at the same time, if they are not satisfied with their employment, the employer should have a right to tell them to move along and find other employment.

  11. They should be able to organize.

    Over the objections of the employer? Can he fire those who organize or refuse to bargain with them?

    1. Goddammit, that was in reply to Hyperion.

      1. Read the rest of my post, you know, the part past the part that you quoted?

        1. Yes, I noted the second part, but it seems to contradict the first, unless you mean that employees can organize if the employer agrees to it, which is why I asked the question for clarity purposes.

          1. It’s not a contradiction at all. To put it very simply, I’m saying that there should be no laws to prohibit them from organizing. At the same time, there should be no constraint on the employer ending the contract. It seems pretty simple to me.

            1. Agreed that there should be no law prohibiting employees from organizing if the employer agrees to it. And if that’s what Richman was talking about, then I have no qualms.

              My original objection was to what Richman seemed to be saying, that it was bad that employees needed to get permission from their employer to organize (i.e., that they should be able to organize and force the employer to recognize their union over his objections, like the law is here in the U.S.); but, if it’s that Bangladeshi law prohibited consenting employers and employees from recognizing the employee union, then I’d agree that law is bad.

              Phew, hope that clears things up!

              1. They should still be able to organize even without the permission of their employers.

                And the employers would still retain the right to fire them.

                If their organizing action was to stage a mass walk-off, what are you going to do, force them back into work just because the employer didn’t agree to it?

  12. Made the mistake of listening to NPR this morning while driving. Damn near put my boot through the radio during this segment on Kerry’s African vacation.

    America is lagging behind the rest of the world in investing in Africa (the SoS’s job is business investment?)…the situation in Nigeria is becoming critical (to whom besides Nigerians and their neighbors?)…reports of Nigerian troops committing human rights abuses against largely islamic rebels was a problem if it were perceived as being against Muslims instead of against terrorists…Kerry lectured the Nigerian President (did the president tell Kerry to F.O. on hypocritical abuse lectures?)…and finally back to why aren’t American businessmen trying to make fortunes in Africa (so they can be lectured by Levin about their finances?)

    1. The job of NPR is apparently to focus on non-issues so that no one will notice the massive incompetence of their masters, the Democrats.

      Don’t listen to NPR unless you are in a really calm mood. You know it’s going to be pure stupid before you start listening.

      1. If you write a daily column, NPR is a great source of 180? research. Otherwise, I agree, it can be quite maddening.

      2. The job of NPR is apparently to focus on non-issues so that no one will notice the massive incompetence of their masters, the Democrats.

        This.

        When the Democrats are in trouble politically, you can count on NPR to run hard hitting stories about the demise of Trap-Jaw Anochetus Ant because of The Greenhouse Effect Global Warming Climate Change Climate Disruption.

      3. It’s a matter of perspective. Progressives call NPR Nice, Polite, Republicans.

  13. “Women in Bangladesh rarely have equal property rights and rarely hold title to land,” the report notes. “Social and customary practices effectively exclude women from direct access to land.”

    This is a key part of the whole analysis, as such imposed class system stifles the creation of small businesses that, historically, have been started by women.

    Bangladesh does not have a free-market economy, starting a business is mired in regulatory red tape

    This is another key aspect. So first you have a class system imposed from above as a matter of policy and then you have a bureaucratic quagmire that few individuals have the wherewithal to at least waddle through, let alone cross quickly. The decision to go underground becomes thus much more attractive for many an entrepreneur, unfortunately attracting also the shady and the unscrupulous kind as well and in vaster numbers.

    Is the free-market or libertarianism to blame for this, as the many intellectually-dishonest Western Progressives will argue? The answer should be by now obvious.

  14. I do wonder what exactly the left-libertarians mean by land reform. And how they hate the whole “tragedy of the commons” thing.

    1. I have the same wonder. All I know about their perspective on the issue is what Sheldon says near the end, “Much as in Britain after the Enclosures, urban migration swells the ranks of workers, allowing employers to take advantage of them.”

      They talk about the Enclosures and either Hayek or Mises noticed that the historic trend was for people to seek only the amount of land they could work, and they make some other points without saying exactly what kind of land reform is needed.

      Whatever it is, it does not sound like my gripe at TVA, with a solution aimed at restoring land that was taken and re-sold or taken and used for TVA parks, back to the previous owners.

      I’ve never heard any of them say that they advocate a Guatemala or Iran (Shah) style reform by taking land from the large land owners and turning it over to the ranch hands, but the argument goes suspiciously in that direction.

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