The Solution to Third-World Poverty?

Buy more stuff:

So what is the humanitarian to do, if he wishes to alleviate the plight of the downtrodden masses? The answer is simple: shift the demand curve for the downtrodden masses' labor services. How does one do this? Again, the answer is simple: think globally and act locally. In other words, put down your "living wage" picket sign and actually go into the Wal-Mart you hate so much. Buy as much sweatshop clothing as you can fit into your car. Convince all your friends to do the same. The evil capitalists will get the signal: "produce more cheap, high-quality goods because it's astonishingly profitable." Translation: build another factory in Bangladesh and hire some people. Of course, you're going to have to give them an incentive to work for you instead of somebody else, which means that you will have to...increase wages and improve working conditions.

Laissez-faire is all too often a psychologically unsatisfying policy solution to social problems for most people. When we see something wrong wrong with society, we want to solve it, actively. But as Daniel Drezner notes in recent article on outsourcing for Foreign Affairs, policy makers, like doctors, should first and foremost do no harm:

So if protectionism is not the answer, what is the correct response? The best piece of advice is also the most difficult for elected officials to follow: do no harm. Politicians never get credit for inaction, even when inaction is the best policy. President George H.W. Bush, for example, was pilloried for refusing to follow Japan's lead by protecting domestic markets -- even though his refusal helped pave the way for the 1990s boom by letting market forces allocate resources to industries at the technological frontier. Restraint is anathema to the political class, but it is still the most important response to the furor over offshore outsourcing. As Robert McTeer, president of the Federal Reserve Bank of Dallas, said when asked about policy responses to outsourcing, "If we are lucky, we can get through the year without doing something really, really stupid."

Luckily, when it comes to issues like sweatshop labor, there is something we, as private individuals, can actively do to solve the problem. Instead of boycotting products made with sweatshop labor as some would propose, we should purchase as many of these products as humanly possible.

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I agree with your first

I agree with your first point. As for the second point, while I did use a bit of hyperbole, the sentiment I expressed is real: not only should people not feel guilty for purchasing products made in sweatshops, they should know that their purchases ultimately help these workers. If they wish to help eliminate third-world poverty even faster, they should purchase more goods from these nations than they would have otherwise.

"Doing no harm" won't put

"Doing no harm" won't put doctors out of a job.

"Instead of boycotting products made with sweatshop labor as some would propose, we should purchase as many of these products as humanly possible."

You've got to be kidding.

?Doing no harm? won?t put

?Doing no harm? won?t put doctors out of a job.

Perhaps not, but a patient's desire for action when the proper medical response is inaction often encourages patients to pursue "alternative" solutions through such fields as homeopathy, chiropractics, and Chinese medicine, among many other forms of quackery. Besides being an incredible waste of money and providing a false sense of security, these practices can be actively harmful, and their use as an "alternative" can discourage people from seeking legitimate and necessary medical help.

Regardless, this is one reason why I oppose the political process as a solution to social problems: it encourages action when inaction is preferable.

You?ve got to be kidding.

Why would I be kidding?

My first point was that

My first point was that "doing no harm" would put policy public policy makers out of a job which is precisely why they can be counted on not to adopt such a policy.

On the second point, you could have any number of reasons for kidding. If you are not kidding do you really intend to buy as many sweat shop products as is humanly possible? I don't believe you will.

I'll also point out that "do

I'll also point out that "do no harm" is not not your policy either, Micha. You've expressed a willingness to weigh benefits to some against harm to others in matters of public policy. Doing no harm would preclude that.

If that's what "do no harm"

If that's what "do no harm" means, then every time a doctor prescribes medication that has adverse side effects, he is violating the Hippocratic Oath.

Doctors, like economists, weigh the costs of benefits of their actions (and inactions). The point of this post, though, is that sometimes the best available policy, in both medicine and economics, is no action at all.

It seems that John Kennedy

It seems that John Kennedy opposes your statement that buying a lot of products produced in sweatshops would increase the laborers welfare. It is implied in his statements, and if so, I would like him to explain why he thinks it is not true.

Trent, It's not true because

Trent,

It's not true because your individual purchases are a tiny drop in an enormous bucket.

If you want to increase the welfare of laborers pick a few out and send them some money; don't kid yourself that your individual purchase of such goods will have any discernible effect on their welfare or that your individual purchase of such goods will have any discernible effect on the purchases of consumers in general.

JTK, Ever heard the parable

JTK,

Ever heard the parable about giving a man a fish versus teaching a man to fish? Picking out a few laborers and sending them money may help in the short term, but it is not sustainable unless you intend to continue sending them gifts. Increased international trade, outsourcing, and the purchase of goods made in sweatshops, on the other hand, can permanently increase the standard of living in what are now third world countries by providing better employment opportunities. And while it is true that one individual's purchase is small, every little bit helps, unlike voting, where only a single vote really matters, and even then only if the election comes down to a single vote difference.

John: While one person's

John:

While one person's individual purchases may be the proverbial drop in the bucket, the purchases of a society as a whole can certainly be beneficial. Fifty years ago, South Korea was an economic mess, just having been through three years of war. It's a pretty darn prosperous country today. The same can be said about the Republic of China on Taiwan. Sweatshops may not be nice, but in many cases they're just a phase in the transition to prosperity -- and the alternative that prevents sweatshops is infinitely worse. (North Korea, anybody?)

Micha, "Give a man a fish

Micha,

"Give a man a fish and you feed him for a day, buy 25 extra pairs of sneakers and you improve the lot of sweatshop workers by a negligible amount. Maybe."

This form of charity makes less sense than Fair Trade coffee.

Hello, JTK, but isn't this

Hello, JTK, but isn't this simply that wonderful thing known as "The Invisible Hand?"

By his definition, nothing we ever do has any significant impact on our economic environment, right? It's not like we have mountains of empirical evidence regarding this. Hell, we just might as well let the government control the whole economy so someone can steer us in the right direction.

Ted, Your purchases have no

Ted,

Your purchases have no discernable effect on the purchases of society as a whole.

I'm not arguing against "sweat shops", I'm arguing aginst irrational charity schemes. Not that people shouldn't be free to engage in such schemes, I'm just pointing out they won't get you what you want.

Trent, The invisible hand

Trent,

The invisible hand operates when you go about the business of serving yourself. You cannot set the invisble hand to the task of helping specific people.

JTK likes to believe that no

JTK likes to believe that no matter what we do, we have no effect. He routinely neglects to step back and see what might happen if thousands, hundreds of thousands, maybe even millions, did the same or something similar. Yes, John, my individual choice does not matter much in the big scheme of things. It is the fact that many others that take the same action as me that makes the difference.

Dave, What the millions buy

Dave,

What the millions buy has nothing to do with what you buy. They'll buy what they'll buy regardless of what you buy.

Spending more of your money on sweatshop goods will of course have effects, but it will have negligible effect on the welfare of sweatshop workers. They will do just as well or poorly regardless of how you as an individual spend your money.

That is true, John, but

That is true, John, but trying to change public opinion from a belief that buying sweatshop goods is harmful for workers to a belief that buying sweatshop goods is beneficial for workers can have signficant effects, which is why firms spend millions of dollars in marketing.

Isn't there any room for

Isn't there any room for condemnation of WalMart?

For instance, WalMart has committed widespread underpayment of workers, both in the form of forcing workers to work off the clock and reducing the reported hours of workers below what they have actually worked. This "cost cutting" goes well beyond mere stinginess with benefits, such as health insurance. Is WalMart above any reproof for this because their inventory management is so good?

They're not forcing anyone

They're not forcing anyone to work off the clock. Any worker who's not satisfied with his pay is free to stop coming in to WalMart to work.

Sweatshops and outsourcing

Sweatshops and outsourcing have precious little to do with "laissez-faire." They're largely a product of U.S. government subsidies to the export of capital and political support for authoritarian, anti-labor regimes. Sweatshop employers in the Third World profit precisely because they DON'T have to compete for labor, or give it an incentive; either the better-paying competition is suppressed, or the bargaining power of labor is otherwise restricted by the state. That's why such employers tend to gravitate toward banana republics where unions are illegal and organizers are terrorized by death squads, or "workers' paradises" like China where they're institutionalized.

Note--just because something is done by a U.S. corporation doesn't mean it's a MARKET activity. As some of us noted on an earlier thread, Bentonville, Ark. (aka Wal-Mart Country) ain't exactly Galt's Gulch. And if Third World labor isn't free, buying more sweatshop labor might not do it any more good than buying the output of Chinese prisons.

Less pro-corporate boilerplate, please.