Another from Mr. Powell

I'm way behind on this so here is Mr. Powells response to my last response.

Dear Mr. Stine,

Thanks for writing back! And thanks for your patience. I always enjoy
these discussions, but I can't always get to them as quickly as I'd
like.

I confess I did not read the link you provided, only because I
think it's important to work out our somewhat limited discussion
first, rather than going on to greater questions of whether or not the
"free market" as a whole is "good" for the poorer classes of China.
As I understand it, we're talking about whether we Americans have any
responsibility to the people who produce goods for us in other
countries, in this case, China. There's the obvious question of
whether Home Depot has a responsibility, since it's inspecting the
factories and paying them to make things. Then there's the nearer
question of whether we, as consumers, have any responsibility to learn
about working conditions elsewhere, or at least act on the information
when we get it.

This is a simpler question than whether in general it's better
or worse for Americans to pay Chinese to do any work for them. I don't
think the "big picture" of us helping the GNP rise really addresses
the question of particular sweatshop conditions.

So let me see if I state your position right, and please correct me if
I'm wrong.

"(1) While poor working conditions and/or human rights abuses are always
regrettable, they are the business of the government overseeing the
location, not corporations on the other side of the world, far less
consumers. Home Depot does not mandate insane workweeks or weekly
finger loss; they pay Chinese businessmen to perform a service. How
the businessmen perform this service is their responsibility, and that
of their government, not ours.

"(2) In fact, our role is entirely beneficial; we put money into the
Chinese economy that would not otherwise be there. Low as the wages
may be, they are wages from our money, and if we stop paying these
factories, those wages will vanish. (3) Any boycott or even the threat of
a boycott, such as this pending sweatshop legislation, is likely to
have one effect, and one effect only: less money into the Chinese
economy, and thus less money trickling down to the poor who want to
work.

Is that about right?

Now, let me try to respond to this, and hopefully I'll cover the
points you recently made as we go.


(1) Our responsibility. Last time you wrote:

> Which is hardly the responsibility or the fault of western factories,
> which is my point. Westerners don't force anybody to work in their
> factories; these people are merely invited to apply.

Yes, I agree with you that we do NOT have responsibility for the
misdeeds of foreign governments. In fact, we aren't even talking about
Western factories, but Chinese factories whose primary
or only clients are Western corporations.

Still, the question remains: what IS our responsibility?

That is why I posed the hypothetical question of the horrid factory
down the street.

> The standard of living is much higher in the United States than in China,
> largely because of the huge wealth of the nation. It wouldn't be possible
> to run such a factory because we are so well off.

Hmm. That seems a bit of a non-answer. The point is whether it would
be RIGHT to shop at such a place, not whether it could happen. (In
reality there are, on American soil, plenty of illegal immigrants
working vast farms for rather ridiculous wages, the fruits of which
end up in the produce aisle, but perhaps this is illegal it doesn't
count as the 'free market'.)

I hoped that by making it down the street, rather than out of sight in
China, it would make that morality question more urgent. So what
do you think? IF there were a factory down the street with equivalent
working conditions to that described in the report I posted online,
identical in every respect except adjusting the low wages to our cost
of living, (half our minimum wage, maybe, instead of half China's)
would it be all right to shop there?

That's what I'm getting at. We aren't responsible for China, but we
are responsible for profiting by their labor.


(2) Our role.

First, a bit about wage slavery.

> The reason you need a monopoly is simple. Without it, people always have a
> choice. They could always move to the factory with slightly better
> conditions and the original factory would have to improve conditions to
> bring back the workers. This means that the low wages and poor conditions
> must be due to pressures beyond the employer's control, ie. lack of
> productivity (employees can only be payed what they produce) or something
> else. The term "slavery" implies that someone is forcing someone to do
> something and they have no choice but without a monopoly on labor, the
> employer clearly cannot force people to work for them.

"MUST" be due? Every time? I still don't see why you can't have
an economy where all the major employers simply choose to underpay. If
they all choose to pay such low wages, there may as well be a
monopoly. Maybe a Henry Ford will come along who'll pay higher
wages and change the economic landscape...but maybe not. If not,
people aren't forced to work by government law; only by that physical
law about having to eat.

> Actually, this rasies the question of how the millionaire (by which I
> assume you to mean someone with an income of $100,000,000 per year) makes
> all that money a year with so little labor.

Of course, the example's extreme for the sake of clarity. Perhaps it's
not worth defending the specifics; my point was that you can have a
rising GNP while average wages are static or even sinking. It wasn't
exactly a business plan. :)

> It is also interesting that you chose an example where there was a
> monopoly on employment. What say there were two competing millionaires and
> six people in the labor market. An employee would merely have to threaten
> to work for the other guy and his employer would be forced to raise his
> wage lest he be outproduced by his rival.

Not if the employers had lunch together and agreed it was more
advantageous to them both to keep wages low. There wouldn't be laws
against this sort of collusion if it had never happened. (And in real
life, too, not just on desert islands.)

> In this way, the wages would be forced up to the productivity
> level of the employees (past which wages cannot rise unless the
> employer is willing to go into loss.)

I'm afraid I cannot accept that wages always magically rise to the
productivity level of the employees. I see where it works in theory,
but I don't see where it always works inexorably in practice. There
seem to be too many variables. For instance, there is no way an
employee who produces a shirt that sells for $15 or so in J. C.
Penney's hasn't produced more than 25 cents or so worth of wage. (Not
exact figures here, but the real figures are something like this for
many a factory overseas.)

> In the case of American CEOs, they are far more essential to the company
> than the average employee.

By picking on CEO compensation, I don't mean to deny that higher
skills deserve higher compensation. I'm all for paying masters more
than the apprentice. Just not 500 times more. Even if it does take
Thomas Monaghan and no one else to make Domino's so big, does Domino's
*need* to be so big? Are the pizza drivers automatically better off,
paid more, less likely to be laid off, because they work for such a
huge corporation? Anyhow, if there are any such benefits, are they worth
that ratio of compensation?

Nor do I mean to ignore all the other good folks, such as
shareholders, bankers, politicians receiving campaign donations, and
so on, who all too often take a grotesquely high share of other
people's work. The CEO's just an easy fellow to start with.

Because more of these profits should stay with the employees.

Economies are not pure mathematics; in real life, humans can be greedy
and can figure out ways to make employees work for a pittance while
pocketing more than their fair share of the profits. It may be that a
truly free market is the best mechanism for minimizing this
phenomenon, or it may not, but the general tone of your conversation
so far is that the iron laws of economics almost always prevent this
from happening in real life. CEOs are just magically worth millions a
year, and this is proved to be so simply because shareholders are
stupid enough to pay them this.

It almost sounds like there's no such a thing as economic injustice
(or stupidity), only developing countries that need a higher income so
they can get a higher GNP so everything will get better.

Maybe this is the crux of the matter. If there is such a thing as
economic injustice, it means there are people who, right now, can be
paid more and treated better *without* the business failing to turn a
profit. It will be a smaller profit (maybe), but everyone will keep
making a living, management included.

But if, as you seem to suggest, no one really has a choice, and what
generally looks an awful lot like slave labor is just what it takes to
turn a profit in that particular niche of the economy, then I can see
why you disagree with me. These people *can't* be paid more; they
*have* to have filthy bathrooms and crowded dormitories and horrid
diets and machinery that chops off a finger or two a week. If you fix
any of those problems, the expense will collapse the business; there
simply isn't any excess profit anywhere to divert to such charities.
Not even the income of the factory managers, or the managers of Home
Depot, or the American consumers demanding cheap products, or the
governments taxing the incomes of them all. Nope. Not a dime to spare.

Hmm. There are so many lovely kinds of injustice in the world; surely
there must be a bit of it in the economy? :)

Maybe it'd help me understand your position better if you gave an
example of what you consider to be economic injustice. Some crime,
present or past, that was perfectly legal at the time, but still
unjust.

Because if there is economic injustice, and if, for example, this
Chinese metals factory is practising it, then isn't Home Depot
profiting by it when they import the brackets and sell them so
cheaply? And don't we profit if we buy the stuff so cheaply?


(3) A boycott/threatened boycott.

Whether or not the individual consumer ought to refuse to buy "Made in
China" is one question, and the efficacy of this decision can
be debated. But let's focus on the anti-sweatshop bill. Were such a
bill enforced, we clearly would have efficacious action!

>
> If these
> factory bosses are raising wages in response to labor shortages,
> mightn't they do the same if threatened with losing the U.S. market?
>
> Actually, it might make matters worse. Generally, when there is less
> potential in the market for a particular item, the company produces less
> of it.

Ah, but why would there be less *potential?* There's all the potential
in the world if they're willing to treat workers as human beings. The
report I cited pointed out that the factory in question had been
willing to make all kinds of changes to accomodate its U. S.
client--in how they *packaged.*

These changes must have cost something, but the factory was willing to
do it to keep the client. Now, if the *entire U. S. clientele*
suddenly threatens to pull out unless minimum working conditions are
met--will all these entrepreneurs, managers, etc., simply throw up
their hands and refuse to cooperate? Some might, maybe, but *all* of
them? Most of them?

The bill isn't saying, "No more Chinese goods." It is saying, "What
you do with your workers is your responsibilty, but if you want us to
buy from you, you not only have to package the product properly, you
have to treat your workers with a minumim of respect. We have those
laws in our own country, and we don't deal with businesses who treat
their people like slaves."

> The factories can be moved to nations where the
> restrictions don't apply and nothing is solved and the Chinese are worse
> of than before.

But this bill isn't just for China; it would apply everywhere.

> However, by purchasing more Chinese made goods, the factory owners have
> incentive to increase production and the increased need for labor will
> cause wages to rise.

Again, with this bill, we'll purchase plenty of goods--that aren't
produced in horrific conditions.

> Moreover, by cutting
> China's income by refusing to trade with her, will reduce the local market
> for goods and labor and thusly hurt the Chinese employees. Their
> conditions will be even worse than before.

Since they would also be worse for the management, perhaps the
management would avoid this scenario by complying with demands for
minimum humane working conditions.

And if they didn't, if they refused, we stopped buying, the factory
closed--well, what's our responsibility then? It almost sounds
like I think we have a responsibility to refuse to fund the production
of goods produced with so much suffering, whereas you think we have a
responsibility to...keep buying no matter what?

Really? But if the price was lower in Vietnam, you'd take your business
there. Which might very well close the factory in China. Right? That'd be
business.

So it seems our only responsiblity here is to never stop buying from a
particular factory on moral grounds. But we can do it to save money.

But by now I've put way too many words into your mouth. Thanks again
for writing.

God Bless.