Since it's germaine, here's all of Friedman's Free to Choose PBS special stuff. Since he's kind of the godfather of NAFTA, CAFTA, and whatever acronyms the China deals have. Have fun reliving that, Geckahn.
He later updated it to be the Dell Theory of Conflict Prevention, which states that no two countries that are part of a global supply chain will ever fight a war against one another.
People claim that relative to a third world country's currency, a dollar is a lot of money.
So is a euro or a pound.
Your point?
In my experience with various people who've come from the third world, the pay is not relative. The most current being my girlfriend's, brother's wife. I'll let that sink in for a little bit. She came from Cambodia, where she told us that she worked 12 hour shifts, and got paid a USD a hour. A hamburger at the kitchen, was 3 USD. Obviously, she never bothered to eat there, as she'd look at it as 3 hours of work. Rent was like 300 a month, and she lived with something like 8 people.
I lived in Thailand for almost a year. Now I'm in China. Yes people get paid less... but almost everything costs less. It's an unfair comparison to compare wages in another country with prices in the US. A hamburger at that kitchen might cost 3 USD, but I bet some rice, meat and vegetables was less than 0.50... USD. I know I could eat a meal in Thailand for 20 Baht, which is about 0.60 USD... of course I could eat a meal for 20 USD also.
In China I can buy a kg of tomatoes for 0.35 USD or so. In the US they're usually at least $2/lb.
Also, as a personal pet peeve its important to note that exchange rates themselves are relatively meaningless, its the change in the exchange rates that matter... people always tell me that 1 USD = 35 Baht, or 7.8 RMB... and that means our economy is better.... but no one tells me 1 Baht = 3.6 Yen, or 1 RMB = 15.4 yen so Thailand or China's economy is better than Japan's.
But... that excerpt makes no actual points. At all. It only hints at points that it may have made earlier, or might make at some future time. That excerpt was completely useless.
Also: explain to me why it's not true that "desperate people are better off earning one dollar a day than no dollars at all."
It makes sense in context, just trust me on that one. It's one paragraph in a 250 page book.
Of course not knowing this, no it doesn't. I don't really get why he posted it.
He posted to make an emotional appeal. Apparently to him that was a point, in and of itself.
Quite frankly I see exactly what pisses Choma off about the exploitative companies, but having started my own company, it failed btw but the learning was good, I also see the companies point of view quite well. IF increasing the wages $2 an hour across 300 workers + shipping is more expensive than coming back and just paying $10 an hour and not having to ship it across the ocean, they'll pull out of the country and everyone will be fucked.
As it is, we're hoping that business people in the country will start setting up support businesses, (restaurants, tool factories, etc), and when the cost of living increases and the factories pull out it will leave some sort of functioning economy behind allowing the country to support itself from there. Although this is just a hope at the moment, as we don't know what exactly will happen when the factories start pulling out, we don't have past precedent only best case and worst case scenarios.
P.S. I believe Britain, despite being a trade partner, had attempted to limit immigration to the US for the specific reason of preventing us from having an industrial revolution as they were experiencing. It didn't work as many of our first steps into the IR were taken by English immigrants. This may be incorrect though, as it's just an aside comment I remember from a 100 level History class.
He later updated it to be the Dell Theory of Conflict Prevention, which states that no two countries that are part of a global supply chain will ever fight a war against one another.
Every time I see an economist talk about Friedman, they do so with a snort of derision. I have never read anything of his, but my mother and father paraphrase him constantly at me.
I'm not sure what to think.
EDIT: Ooh, China? I'm going there in a few months.
Since it's germaine, here's all of Friedman's Free to Choose PBS special stuff. Since he's kind of the godfather of NAFTA, CAFTA, and whatever acronyms the China deals have. Have fun reliving that, Geckahn.
What do you mean?
Your avvie.
ah yes.
too be completely honest, I agree with Galbraith about many things.
Friedman's Golden Arches Theory is pretty much bunk, yeah. Countries will quite happily go to war with a country they have economic ties with - eg, Britain and Germany before WW1.
Friedman's Golden Arches Theory is pretty much bunk, yeah. Countries will quite happily go to war with a country they have economic ties with - eg, Britain and Germany before WW1.
While I don't doubt the theory is bunk, that was a somewhat more complicated situation. Seeing as how England had economic ties with all powers in the area, it would have had to fight somebody they had economic ties to no matter which side they chose.
Friedman's Golden Arches Theory is pretty much bunk, yeah. Countries will quite happily go to war with a country they have economic ties with - eg, Britain and Germany before WW1.
While I don't doubt the theory is bunk, that was a somewhat more complicated situation. Seeing as how England had economic ties with all powers in the area, it would have had to fight somebody they had economic ties to no matter which side they chose.
..Yeah, which shows that tied economies will go to war with each other.
There are absolutely are problems with workers rights in third world countries. But you have to remember that we went through pretty much the same thing in the late 1800s. A society has to go through an industrialization process before every family can have their own car and getting food is never a problem.
You don't go from nothing to what we have magically. It is a process, that takes time.
I think that's bollocks, frankly. There's no need for a society to go through the equivalent of the Triangle Shirtwaist Factory Fire in order to progress economically. It's not a rite of fucking passage for a nation to spend a decade or two under shoddy labour laws. What's going on is that businesses are taking advantage of cultures where safety regulations aren't demanded, where bribery and nepotism are culturally acceptable, and where need is great enough to sacrifice health for cash in order to do things they can no longer get away with elsewhere. The reasons for relatively shithouse working conditions in developing countries are not historically analogous to those in western countries.
There are absolutely are problems with workers rights in third world countries. But you have to remember that we went through pretty much the same thing in the late 1800s. A society has to go through an industrialization process before every family can have their own car and getting food is never a problem.
You don't go from nothing to what we have magically. It is a process, that takes time.
I think that's bollocks, frankly. There's no need for a society to go through the equivalent of the Triangle Shirtwaist Factory Fire in order to progress economically. It's not a rite of fucking passage for a nation to spend a decade or two under shoddy labour laws. What's going on is that businesses are taking advantage of cultures where safety regulations aren't demanded, where bribery and nepotism are culturally acceptable, and where need is great enough to sacrifice health for cash in order to do things they can no longer get away with elsewhere. The reasons for relatively shithouse working conditions in developing countries are not historically analogous to those in western countries.
There's no absolute NEED for conditions to be shitty before they can get better, but that's like saying there's no need for absolute power to corrupt absolutely (or any other piss poor but effectively inevitable behavior).
By definition, any third world country where there are no worker safety regulations and the workers are paid squat are economic cesspools, because if they weren't no one would ever agree to work under those conditions. Therefore, the local government and population desperately needs ANY work and will do it under extremely favorable conditions for the business (low wages and effectively no outside responsibilities such as health care or worker's compensation). Everyone's winning in that situation, and the fact the business is winning "more" has nothing to do with them being evil and everything to do with relative power.
In and of itself, that's good enough, because everyone is getting what they want and everyone is free to walk away. The part that makes this a GOOD process is what comes after, the inevitable economic growth. There's hard outside currency being pumped into the region, at the lowest levels of society, which leads to more growth to provide more goods and services to the people earning money, which generates more wealth, which leads to more businesses, which leads to more wealth. It's a self-catalyzing reaction, that inevitably (and much more quickly thanks to our involvement) leads to a "good" society where the worker gets everything a first world society thinks they should have.
As much as people who don't understand economics like to try and judge the less desirable part of the process, it's a necessary evil. No business in existence can, or SHOULD, look at a country with no infrastructure and an unskilled labor force that makes $0.75/hr and would jump at the chance for $1.00/hr and just decide from the goodness of their hearts to go with $6.75/hr with full medical. The thing no one seems willing to accept is compensation isn't some sort of absolute value handed down from god on high, it's a simply result of the combination of local labor supply, the value of the work, the unpleasantness of the job (relative other local jobs), and so on. Just because Jimmy in New Jersey and Bob in Pakistan make the same Nike sneakers doesn't mean they automatically should get the same amount of compensation, and it's hopelessly naive to complain they do.
So the choices are the business goes in and deals with the economic realities that are there (and a willing population that benefits from what they do) or they just ignore the region altogether and let it wallow along.
edit: That'll teach me to not just reply to the last page of a thread, because then I just repeat an argument (though I think I elaborated more). The real answer to Cat would be: Just saying it (especially in the face of consensus on the part of the actual experts) doesn't make it so. Yes, they take advantage of local lack of a worker's rights movement or anti-corruption policies, but those things are a RESULT of the shitty economic conditions. When the population is categorically poor they are less concerned about everything but the grossest of government abuses (relatively). The companies are there for economics reasons, not to simply take advantage of leval loopholes (though those are certainly a plus).
Every time I see an economist talk about Friedman, they do so with a snort of derision. I have never read anything of his, but my mother and father paraphrase him constantly at me.
There are many books on globalization that are as accessible as his, but not nearly as condescending, and much better researched.
In my experience with various people who've come from the third world, the pay is not relative. The most current being my girlfriend's, brother's wife. I'll let that sink in for a little bit. She came from Cambodia, where she told us that she worked 12 hour shifts, and got paid a USD a hour. A hamburger at the kitchen, was 3 USD. Obviously, she never bothered to eat there, as she'd look at it as 3 hours of work. Rent was like 300 a month, and she lived with something like 8 people.
So shouldn't she have gone down the street to that other company that was paying $10/hr and offered full medical and 3 weeks a year of vacation time?
Exactly, see this is what I was trying to say the whole time. It's her fault for being too stupid to realize that. The third world is poor because they choose to be.
my understanding is that many third world countries have governments that are corrupt on a scale we can't even imagine. countries with less corruption and liberal economic policies generally do well. example: botswannna before the AIDS epidemic. even developed countries with corrupt governments and economic systems do poorly. example: Russia.
So, it's not that the average poor person chooses to be poor, if we had leaders and elites that exploited the system that badly we would be poor too. Imagine 2 dozen Enron fiascos,, then go from there.
Friedman's Golden Arches Theory is pretty much bunk, yeah. Countries will quite happily go to war with a country they have economic ties with - eg, Britain and Germany before WW1.
While I don't doubt the theory is bunk, that was a somewhat more complicated situation. Seeing as how England had economic ties with all powers in the area, it would have had to fight somebody they had economic ties to no matter which side they chose.
..Yeah, which shows that tied economies will go to war with each other.
It has nothing to do with tied economies, and everything to do with the magical forcefield erected by the synergy created by multiple McDonalds franchises. If Iraq had wanted to avoid a war, they really should've just put up a McDonalds.
ElJeffe on
I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
There are absolutely are problems with workers rights in third world countries. But you have to remember that we went through pretty much the same thing in the late 1800s. A society has to go through an industrialization process before every family can have their own car and getting food is never a problem.
You don't go from nothing to what we have magically. It is a process, that takes time.
I think that's bollocks, frankly. There's no need for a society to go through the equivalent of the Triangle Shirtwaist Factory Fire in order to progress economically. It's not a rite of fucking passage for a nation to spend a decade or two under shoddy labour laws. What's going on is that businesses are taking advantage of cultures where safety regulations aren't demanded, where bribery and nepotism are culturally acceptable, and where need is great enough to sacrifice health for cash in order to do things they can no longer get away with elsewhere. The reasons for relatively shithouse working conditions in developing countries are not historically analogous to those in western countries.
On what basis do you say that? Because I can think of dozens of empirical examples where that was the case, and not a single one where that wasn't the case (I'm not claiming that no such example exists, but I don't know of one). And there are a lot of reasons why it should be the case--a third world country has no comparative advantages in trade with the industrialized world except for possibly natural resources (which are probably mismanaged because of shitty governments which themselves are ultimately a result of poverty) and cheap labor. So, realistically, the only way a third world country can expect to start a booming economy is by using the only comparative advantage it has.
I'm not convinced it's wrong for companies to pay foreign workers very low wages in unsafe conditions. First of all, it is better for them to be paid something than nothing, and if it wasn't than the workers wouldn't choose to work. Second of all, if some company is paying its workers in some country, say, a dollar a day, and that actually is a ridiculously low wage to pay given the price that the product can be sold for in the third world (even including shipping costs), then there's nothing stopping some other company from coming along and offering wages of $1.50 a day, stealing all of the first company's workers. I'm sure there are plenty of practical problems that happen, and I'm not saying that it's a pleasant process, but I think it's a good principle overall.
There are absolutely are problems with workers rights in third world countries. But you have to remember that we went through pretty much the same thing in the late 1800s. A society has to go through an industrialization process before every family can have their own car and getting food is never a problem.
You don't go from nothing to what we have magically. It is a process, that takes time.
I think that's bollocks, frankly. There's no need for a society to go through the equivalent of the Triangle Shirtwaist Factory Fire in order to progress economically. It's not a rite of fucking passage for a nation to spend a decade or two under shoddy labour laws. What's going on is that businesses are taking advantage of cultures where safety regulations aren't demanded, where bribery and nepotism are culturally acceptable, and where need is great enough to sacrifice health for cash in order to do things they can no longer get away with elsewhere. The reasons for relatively shithouse working conditions in developing countries are not historically analogous to those in western countries.
On what basis do you say that? Because I can think of dozens of empirical examples where that was the case, and not a single one where that wasn't the case (I'm not claiming that no such example exists, but I don't know of one). And there are a lot of reasons why it should be the case--a third world country has no comparative advantages in trade with the industrialized world except for possibly natural resources (which are probably mismanaged because of shitty governments which themselves are ultimately a result of poverty) and cheap labor. So, realistically, the only way a third world country can expect to start a booming economy is by using the only comparative advantage it has.
I'm not convinced it's wrong for companies to pay foreign workers very low wages in unsafe conditions. First of all, it is better for them to be paid something than nothing, and if it wasn't than the workers wouldn't choose to work. Second of all, if some company is paying its workers in some country, say, a dollar a day, and that actually is a ridiculously low wage to pay given the price that the product can be sold for in the third world (even including shipping costs), then there's nothing stopping some other company from coming along and offering wages of $1.50 a day, stealing all of the first company's workers. I'm sure there are plenty of practical problems that happen, and I'm not saying that it's a pleasant process, but I think it's a good principle overall.
The other company wouldn't need to since the workers are basically subsistence and would either take up the second job in order to not starve to death or have a realtive who likely would. The large numbers and lack of organization (with corporations funding or paying a blind eye to murders of unionizers) is generally the reason why they are exploitable. That is beside the point, though, since wages are in no way tied in to factory construction or its safety. The only justifiable aspect of that is when you put the cost of installing a railing over the price of a new manager every time one falls to their death/major injury. On top of the whole 'inherent value of human life' aspect.
The other company wouldn't need to since the workers are basically subsistence and would either take up the second job in order to not starve to death or have a realtive who likely would. The large numbers and lack of organization (with corporations funding or paying a blind eye to murders of unionizers) is generally the reason why they are exploitable. That is beside the point, though, since wages are in no way tied in to factory construction or its safety. The only justifiable aspect of that is when you put the cost of installing a railing over the price of a new manager every time one falls to their death/major injury. On top of the whole 'inherent value of human life' aspect.
In theory, there would be way more than two companies involved. All the companies in all the markets that are interested in cheap labor will move parts of their companies to these countries. Eventually an efficient number of workers will be hired at an efficient wage, and after enough money comes into the country, things will start improving.
The other company wouldn't need to since the workers are basically subsistence and would either take up the second job in order to not starve to death or have a realtive who likely would. The large numbers and lack of organization (with corporations funding or paying a blind eye to murders of unionizers) is generally the reason why they are exploitable. That is beside the point, though, since wages are in no way tied in to factory construction or its safety. The only justifiable aspect of that is when you put the cost of installing a railing over the price of a new manager every time one falls to their death/major injury. On top of the whole 'inherent value of human life' aspect.
In theory, there would be way more than two companies involved. All the companies in all the markets that are interested in cheap labor will move parts of their companies to these countries. Eventually an efficient number of workers will be hired at an efficient wage, and after enough money comes into the country, things will start improving.
/sarcasm on
clearly, they often don't improve, this is because of the west's exploitive, imperialistic practices, and not because of AIDS, civil war, ethnic cleansing, government corruption, or socialist economic policies. /sarcasm off
I'm not saying that cooperations always have the best interests of their workers in mind, clearly they don't. They don't even nessesarily have the best interests of the consumer in mind. Feel free to boycott evil exploiters, heck, post some, I love taking my buisness to honest companies, and avoiding those with shady buisness practices.
As far as conditions go, I'm for letting the governments of those countries handle them, and helping them (the governments) when possible. Most third world workers work for companies based in the third world, so I'm not seeing the value in just going after the western companies who do business there.
Posts
Your avvie.
He later updated it to be the Dell Theory of Conflict Prevention, which states that no two countries that are part of a global supply chain will ever fight a war against one another.
I lived in Thailand for almost a year. Now I'm in China. Yes people get paid less... but almost everything costs less. It's an unfair comparison to compare wages in another country with prices in the US. A hamburger at that kitchen might cost 3 USD, but I bet some rice, meat and vegetables was less than 0.50... USD. I know I could eat a meal in Thailand for 20 Baht, which is about 0.60 USD... of course I could eat a meal for 20 USD also.
In China I can buy a kg of tomatoes for 0.35 USD or so. In the US they're usually at least $2/lb.
Also, as a personal pet peeve its important to note that exchange rates themselves are relatively meaningless, its the change in the exchange rates that matter... people always tell me that 1 USD = 35 Baht, or 7.8 RMB... and that means our economy is better.... but no one tells me 1 Baht = 3.6 Yen, or 1 RMB = 15.4 yen so Thailand or China's economy is better than Japan's.
He posted to make an emotional appeal. Apparently to him that was a point, in and of itself.
Quite frankly I see exactly what pisses Choma off about the exploitative companies, but having started my own company, it failed btw but the learning was good, I also see the companies point of view quite well. IF increasing the wages $2 an hour across 300 workers + shipping is more expensive than coming back and just paying $10 an hour and not having to ship it across the ocean, they'll pull out of the country and everyone will be fucked.
As it is, we're hoping that business people in the country will start setting up support businesses, (restaurants, tool factories, etc), and when the cost of living increases and the factories pull out it will leave some sort of functioning economy behind allowing the country to support itself from there. Although this is just a hope at the moment, as we don't know what exactly will happen when the factories start pulling out, we don't have past precedent only best case and worst case scenarios.
P.S. I believe Britain, despite being a trade partner, had attempted to limit immigration to the US for the specific reason of preventing us from having an industrial revolution as they were experiencing. It didn't work as many of our first steps into the IR were taken by English immigrants. This may be incorrect though, as it's just an aside comment I remember from a 100 level History class.
Every time I see an economist talk about Friedman, they do so with a snort of derision. I have never read anything of his, but my mother and father paraphrase him constantly at me.
I'm not sure what to think.
EDIT: Ooh, China? I'm going there in a few months.
ah yes.
too be completely honest, I agree with Galbraith about many things.
While I don't doubt the theory is bunk, that was a somewhat more complicated situation. Seeing as how England had economic ties with all powers in the area, it would have had to fight somebody they had economic ties to no matter which side they chose.
..Yeah, which shows that tied economies will go to war with each other.
I think that's bollocks, frankly. There's no need for a society to go through the equivalent of the Triangle Shirtwaist Factory Fire in order to progress economically. It's not a rite of fucking passage for a nation to spend a decade or two under shoddy labour laws. What's going on is that businesses are taking advantage of cultures where safety regulations aren't demanded, where bribery and nepotism are culturally acceptable, and where need is great enough to sacrifice health for cash in order to do things they can no longer get away with elsewhere. The reasons for relatively shithouse working conditions in developing countries are not historically analogous to those in western countries.
There's no absolute NEED for conditions to be shitty before they can get better, but that's like saying there's no need for absolute power to corrupt absolutely (or any other piss poor but effectively inevitable behavior).
By definition, any third world country where there are no worker safety regulations and the workers are paid squat are economic cesspools, because if they weren't no one would ever agree to work under those conditions. Therefore, the local government and population desperately needs ANY work and will do it under extremely favorable conditions for the business (low wages and effectively no outside responsibilities such as health care or worker's compensation). Everyone's winning in that situation, and the fact the business is winning "more" has nothing to do with them being evil and everything to do with relative power.
In and of itself, that's good enough, because everyone is getting what they want and everyone is free to walk away. The part that makes this a GOOD process is what comes after, the inevitable economic growth. There's hard outside currency being pumped into the region, at the lowest levels of society, which leads to more growth to provide more goods and services to the people earning money, which generates more wealth, which leads to more businesses, which leads to more wealth. It's a self-catalyzing reaction, that inevitably (and much more quickly thanks to our involvement) leads to a "good" society where the worker gets everything a first world society thinks they should have.
As much as people who don't understand economics like to try and judge the less desirable part of the process, it's a necessary evil. No business in existence can, or SHOULD, look at a country with no infrastructure and an unskilled labor force that makes $0.75/hr and would jump at the chance for $1.00/hr and just decide from the goodness of their hearts to go with $6.75/hr with full medical. The thing no one seems willing to accept is compensation isn't some sort of absolute value handed down from god on high, it's a simply result of the combination of local labor supply, the value of the work, the unpleasantness of the job (relative other local jobs), and so on. Just because Jimmy in New Jersey and Bob in Pakistan make the same Nike sneakers doesn't mean they automatically should get the same amount of compensation, and it's hopelessly naive to complain they do.
So the choices are the business goes in and deals with the economic realities that are there (and a willing population that benefits from what they do) or they just ignore the region altogether and let it wallow along.
edit: That'll teach me to not just reply to the last page of a thread, because then I just repeat an argument (though I think I elaborated more). The real answer to Cat would be: Just saying it (especially in the face of consensus on the part of the actual experts) doesn't make it so. Yes, they take advantage of local lack of a worker's rights movement or anti-corruption policies, but those things are a RESULT of the shitty economic conditions. When the population is categorically poor they are less concerned about everything but the grossest of government abuses (relatively). The companies are there for economics reasons, not to simply take advantage of leval loopholes (though those are certainly a plus).
There are many books on globalization that are as accessible as his, but not nearly as condescending, and much better researched.
my understanding is that many third world countries have governments that are corrupt on a scale we can't even imagine. countries with less corruption and liberal economic policies generally do well. example: botswannna before the AIDS epidemic. even developed countries with corrupt governments and economic systems do poorly. example: Russia.
So, it's not that the average poor person chooses to be poor, if we had leaders and elites that exploited the system that badly we would be poor too. Imagine 2 dozen Enron fiascos,, then go from there.
It has nothing to do with tied economies, and everything to do with the magical forcefield erected by the synergy created by multiple McDonalds franchises. If Iraq had wanted to avoid a war, they really should've just put up a McDonalds.
I'm not convinced it's wrong for companies to pay foreign workers very low wages in unsafe conditions. First of all, it is better for them to be paid something than nothing, and if it wasn't than the workers wouldn't choose to work. Second of all, if some company is paying its workers in some country, say, a dollar a day, and that actually is a ridiculously low wage to pay given the price that the product can be sold for in the third world (even including shipping costs), then there's nothing stopping some other company from coming along and offering wages of $1.50 a day, stealing all of the first company's workers. I'm sure there are plenty of practical problems that happen, and I'm not saying that it's a pleasant process, but I think it's a good principle overall.
The other company wouldn't need to since the workers are basically subsistence and would either take up the second job in order to not starve to death or have a realtive who likely would. The large numbers and lack of organization (with corporations funding or paying a blind eye to murders of unionizers) is generally the reason why they are exploitable. That is beside the point, though, since wages are in no way tied in to factory construction or its safety. The only justifiable aspect of that is when you put the cost of installing a railing over the price of a new manager every time one falls to their death/major injury. On top of the whole 'inherent value of human life' aspect.
/sarcasm on
clearly, they often don't improve, this is because of the west's exploitive, imperialistic practices, and not because of AIDS, civil war, ethnic cleansing, government corruption, or socialist economic policies. /sarcasm off
I'm not saying that cooperations always have the best interests of their workers in mind, clearly they don't. They don't even nessesarily have the best interests of the consumer in mind. Feel free to boycott evil exploiters, heck, post some, I love taking my buisness to honest companies, and avoiding those with shady buisness practices.