Made in China: The New Plantations

Dear Mr. Stine,

Thanks for your note! Sorry it’s taken me a bit to respond.

It would seem that because people traveled so far just to get sweatshop jobs that they are better than the alternative, no?

Unfortunately, that only speaks poorly for the alternative. In fact, your links were great, they shed a little light there. For instance, the NYT article pointed out:

Government policy is playing a role in creating the coastal labor shortages. Trying to close the yawning income gap between the urban rich and the rural poor in China, the national government last year eliminated the agricultural tax, and it also stepped up efforts to develop local economies in poor, inland and western provinces, which have mostly been left behind.

Perhaps some people, at least, were leaving their homes because of intolerable taxation. There are precedents.

Wage slavery can only exist where someone holds a monopoly on employment. With hundreds of companies owning factories in China, this is not the case.

Maybe we’re using the term differently; the point is, if people will work under such intolerable conditions, there must be some severe external pressure at work, severe enough to be at least analogous to that which keeps people enslaved. I don’t see why you need a monopoly; all you need are the majority of factories having the same deplorable conditions. That’s how it worked when Dickens wrote Hard Times, that’s how it works today.

Incidentally, the second article’s report of a rising GNP and per capita income in China proves very little regarding working conditions. As you know, if a millionaire on a desert island employs three people for 1 cent a year, the per capita income is about $250,000.01. Nor is the example frivolous, when even in the U. S. the compensation for an average CEO is hundreds of times that of the average worker. Imagine the ratio in a country where people get paid cents a day.

Now, the NYT article indicates that many factories are being forced to improve their conditions because of labor shortages. This is a recent development, but it’s great. Of course it would be wrong to blame foreign buyers like Home Depot for all China’s internal problems—merely another variation on imperialism. Still, we can take responsibility for our part in the mess, and that’s the point of restricting imports from sweatshops. You may believe this would only discourage more factories, but what is this belief based on? 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?

Lastly, there’s the question of whether it’s moral to knowingly buy the fruit of such horrid labor. If the factory described in my article was down your street, and the people were living in the same conditions, an average of 5 of them losing fingers each month, getting paid the U. S. equivalent of those wages…would you go to the gift shop?

Thanks again for writing! No obligation to write back, of course, but I’ll welcome any further thoughts you have.

Bill Powell

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.

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.

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.

Bill Powell

Dear Mr. Stine,

Good to hear from you too, and sorry for my much longer delay.

I think we’ve reached that frightening point in a discussion where we bark our shins on our first principles. I don’t know how much longer we can talk about all this without required detours onto weightier topics like the Dignity of the Human Person. It may be that we diverge so radically that we simply have to agree to disagree.

On this note, I hope you’ll forgive a personal question: do you happen to be Catholic? I only ask because of all the CEOs in the world to use as an example, you chose Tom Monaghan, the patron saint of Catholic capitalists. (Also, I’m haunted by this irrational sense that you went to the same high school I did, Seton in Manassas.) If you are Catholic, you see, that opens a whole world of common ground on which to hunt quotes from encyclicals and such. If not, pardon the question.

While I want to respond to all your points, I think our main argument is over this statement of yours:

In fact, I don’t consider a factory with poor working conditions to be an abuse of human rights so long as the people who choose to work there do so of their own free will and without coercion, force or deception. My point is, that Home Depot, Walmart etc, could pay people to taste test poison, but so long as they did not coerce people into it they are not at fault, or rather, they did not abuse them. They are not responsibile for inflicting any harm on these people. Any responsibility that said buisnesses my have would be that they did not explicitely go out of their way to provide charity for said people. But in this, they would be no more responsible than the rest of society.

For me, this is the crux of our discussion. Everything else will be something of a postscript.

I don’t know what first principles underly this thought for you, so I’ll just have to explain mine. I’m glad you went so far as to give the example of taste testing poison; that simplifies and clarifies your position even further than talking about poor working conditions, a phrase always in danger of becoming nebulous. Taste testing poison is wonderfully concrete.

Taste testing poison. Where do I begin? To pay a man to taste test poison is to pay him to hurt himself. Not just to work hard, like a man making hay, or to risk harm, like a soldier, but deliberately and without question to hurt himself (perhaps fatally, if he tries to get overtime).

Now since you talk about charity and obligations and injustice (and Tom Monaghan) I’m going to guess you have some strong ideas somewhere on the intrinsic value of the human being. I’m not being snide; plenty of rational people claim that life has no value except what we give it, that it’s a man’s own business if he shoots himself or blows his brains on crack.

I do not think it’s a man own business whether he blows his brains on crack. I think he’s worth too much. I am fiercely devoted to individual freedom, but freedom, like all good things, has limits, or rather a shape, and if that shape does not include putting poison in your wife’s soup, neither does it include putting it in your own. Why I hold this is ultimately a question of religion, but plenty of societies have drafted laws against suicide without putting Sacred Heart statues on their courthouses. Anyhow, I’m not trying to prove this, I’m explaining that it’s one of my principles.

I am so valuable that I have certain obligations to myself, even if I’m in the mood to fling myself off a building. But since each of us humans is that valuable, we also have obligations to each other. If a man is drowning in a swimming pool and you know how to swim, you have to try to rescue him. Why? We could argue about the reasons, but if we both acknowledge that the obligation exists, we have somewhere to start from.

And it is this kind of obligation that managers and other rulers have towards their employees. A man might agree to dig coal every morning in a collapsing mine. A woman might agree to be periodically gang raped. But it is wrong to ask it of them. It is wrong to ask it even if you offer them money and even if they say yes. It is wrong because they are people, and you are violating them.

Now we could argue forever about exactly what poor working conditions intrinsically violate people’s dignity. But this seems to be our fundamental disagreement; I think there are such things, and you seem to think there aren’t.

With the example of your horrid factory, again I see nothing wrong necessarily of a factory with poor working conditions… The only reason such a factory would be considered so horrid and outrageous by modern socety is because society is used to and has access to much better.

I won’t say American society hasn’t swung too far towards a maze of silly, bureaucratic, and even pernicious regulations. But requiring mutual consent forms for kisses doesn’t disprove the existence of rape. Our overregulation doesn’t mean there are no such things as abusive factory conditions. Whether this or that particular situation is actually abusive we can debate, but not if you think there can never be any such thing as abusive, intolerable working conditions. Do you really think that? Can you not imagine any kind of horrible work situation that would be intrinsically wrong—what if a manager paid people to saw their own legs off? Slowly? I guess you already gave the poison example. I just have trouble believing it.

Just because people are willing to submit to abuse does not make it less abusive. If a man beats his wife, he is unlikely to be acquitted when she assures the jury that she doesn’t mind. Nor would they be further softened if he offered to pay five dollars next time, and she accepted.

This is my main point. If there are such things as abusive factory conditions, then the agreement and monetary compensation of the injured party does not erase the fact of the abuse. And I challenge you to hold that you can’t even imagine such a situation. If you grant the possibility, then it might or might not be fruitful to return to the discussion of this particular Chinese factory, or other workplaces we Americans patronize. But if you don’t, if anything anyone ever agrees to be paid to endure must always be okay, I really wonder what we can have to talk about.

I’ve already tried your patience by writing too much; I’m going to try to address at least your other major points, but I think they all rest upon this central issue.

You seem to atribute low wages in China to a conspiracy among the American companies that own factories there. Given that hundreds of American companies own factories in China and there are thousands of factories besides, this seems very far fetched to me.

A conspiracy means secrecy, so that sounds far fetched to me too. I think it’s a combination of quite public greed on the part of the corporations as well as various abysmal conditions in China that make people desperate enough to accept these jobs. As your article pointed out, as soon as the government lifted that agricultural tax, people began pouring back into the countryside. That must have been some tax indeed to make people leave their families and children and accept such deplorable conditions.

Also, it is easy to prove that the low wages aren’t due to a conspiracy but to market forces. In this case, surplus. There is a greater supply of labor than demand and this drives the price for labor down. Hence, the low wage and poor working conditions.

Market forces is an infelicitous phrase; it implies managers are forced to work people 12, 14, 16, 18 hours a day and pay them half the legal minimum wage. But if their cultural norms included an injunction against this treatment, so that even if managers tried to treat people thus, people would refuse to accept such conditions, I submit that they would not happen, or would happen rarely. Wages would go down, but only down to a decent minimum wage. Even if it meant we Americans had to pay twice as much at Home Depot.

Now Chinese cultural norms aren’t our responsibility, of course. But our cultural norms ought to include not buying from such overlords.

How wages are determined generally in the same way in all markets. Wages are an investment…

And speaking of wages, the Catholic principle of a just minimum wage is based (as far as I can tell) on the same idea of an obligation to a fellow human that lies above the market forces. Your equations are useful in describing certain market dynamics, but they must not be allowed to obscure the fundamental difference between a pile of capital and a human worker. Capital does not get hungry, it rarely has children, and it has produced very little quality poetry.

If you employ someone full-time (aside, perhaps, from children or the handicapped, assuming they’re partially subsidized elsewhere), that person relies solely on your wage to provide himself, and possibly his family, with the necessities of life. And a human has a right to the necessities of life. The right is so strong that, as you’d probably agree, a starving man can steal food if he has no other option. Of course, people also, in most cases, have a corresponding duty to work for their living (hence the evil of the welfare state), but if someone fulfills this duty and works for you all day, 5 or 6 days a week, you must pay him enough to decently survive. You simply must. That is his right because he’s a human being and he’s working for you full time. Otherwise you are, in a sense, taking your profits from his his hunger, his misery, perhaps his very flesh.

So yes, it’s better for you to pay 5 people a just minimum wage then 10 people only half a just minimum wage. To point to the 5 people you thus cannot employ sounds suspiciously like making your business a charity operation; a manager can only be responsible for paying wages to his own employees, not all the other potential employees in the world, and he must pay his own employees just wages.

Basically what this shows is that any attempt to artificially increase the wage will cause unemployment and increase the labor supply, thus undoing all the good of before.

If his business truly cannot survive without paying unjust wages, well, I don’t see how this is different from a business that can’t survive without shareholder fraud or pork provisos in Congressional bills or other crimes. There are such businesses, and they deserve to fail. Was anyone sorry to see Enron go? Didn’t lots of ordinary, hard-working people lose their jobs?

Again, if a just minimum wage were a widespread cultural principle, and if, for instance, in this heavy metals factory, higher wages really could not be taken from some other pocket of profit in the corporate chain, then the costs would be passed on merrily to the consumer, and unemployment would not necessarily rise. Demand for some items would most probably fall, meaning some unemployment, yes, but if (as I pointed out earlier), this bill passed and we Americans stopped buying items from all sweatshops everywhere, then we couldn’t just go buy it dirt cheap somewhere else, because there would be no such place. Demand wouldn’t fall nearly as much, only our excess wealth you mention (more on that later!), at least if we have really needed or wanted all this stuff we’ve been buying. And if we haven’t…

In response to my criticism of your island example:

I don’t mind retracting my allergy-inducing island example if I can keep my point that just because a number called the GNP goes up, it doesn’t mean everyone or even most people in a country are actually benefiting. The realities are a wee bit more complex than that.

Factor in cost of capital (factories), shipping, marketing, distribution, management (not just management wages, but also expenses), legal fees (you don’t have to do anything wrong to incure these), accounting, investments (needed to keep any company afloat) and that $15 dollars 25 cent gap narrows pretty rapidly.

Yes, but the devil is in the details. I grant that you can’t pay the worker $14 for a $15 shirt, but that doesn’t mean you can only pay 25 cents. We would have to invade the accounting department at J. C. Penney’s for either of us to prove our case conclusively, but I maintain that there is in every situation a just minimum wage that must be paid to each human full-time worker (who has no other subsidy) no matter what.

The CEO’s earnings in an average business is just chicken scraps compared to the total expensess that the company faces on a yearly basis. It’s not simply corporate glut as some people imagine.

No, you’re right, it’s not simply corporate glut, there are also government glut, lawyer glut, insurance glut, and all sorts of other glut as well. It’s a glutty sort of world these days.

Dominoes Pizza guys don’t get paid much more than they would if Dominoes were a much smaller corporation.

Much more? We need details again. Are there no independent pizza places anywhere that pay the same wage? Or even more? Is it always so wonderful to be huge?

Thomas Monaghan makes so much money, not because he cheats pizza delivery guys of their just desserts but because his company employs hundreds of thousands of workers a year and supplies them with the necessary capital to produce and deliver. His salary takes a miniscule amount off the top of each pizza. Mr. Monaghan’s employees make many times more per pizza sold than he does.

I notice you say that his company does these nice things for the employees, rather than Mr. Monaghan himself personally going about and seeing them off each morning. What exactly makes all these people his?

Now I have no desire to pick on Mr. Monaghan personally, there are many quite odious examples of his class we should pick on before him, so let’s keep this impersonal. I grant the math of a few cents per pizza for the CEO. But now I fear we’re back to the desert island, with one master supervising his herd of pizza deliverers. The CEO is only the most notable example of the ravenous herd of managers, trustees, stockholders, and so on within the company that take their cut, and that doesn’t even touch the lovely people outside the company that you brought up yourself, lawyers and corrupt politicians and insurance salesmen and bureaucrats and all the rest that, directly or indirectly, profit off that rapidly shrinking group of people who are actually creating wealth. I’m not saying a company has no need whatsoever of managers or such people, only that there is a great deal of overcompensation in this world, which, as far as I can tell, generally comes from the paychecks of those who are paid least.

So, the larger and more a company produces, the less a huge CEO salary ’sucks’ from the little guy and the greater a percentage of the money that can be invested in the ‘little guy.’

Except that the larger a company is, the larger the rest of the parasitic bureaucracy is, too.

After a point, CEO greed maxes out. Company management is more a way of life than a job, they do it because they enjoy it.

Ah, I think they must also have some small affection for six- and seven- and eight-figure salaries as well. I’m not one to say whether they also happen to enjoy their job. I hope they do.

Mr. Monaghan is as necessary for the selling of each pizza as is the employees but they collectively actually garner a larger percent of the profit than he.)

Why can you lump thousands of employees together like this? Who cares if they collectively garner a larger percent of the profit? The question is whether any one man should wind up with millions of dollars, not how widely he casts his nets.

The greatest conflicts in the union conflicts in previous half of the century were not between workers and companies but between workers and workers.

I just read this somewhere else, but no one ever seems to footnote it. (I know, not fair, we’re not footnoting anything.) I certainly don’t mind granting that unions have plenty of rotten things to answer for, as long as we don’t forget that they were begun in order to fight many rotten things.

Unions regularly demand increases in wages and benefits.

Aha. Please distinguish between raising a wage up to a decent minimum wage, and people already making several times the minimum wage fighting for more. I would not say a company is unjust for resisting a wage increase from $40 to $80 an hour. I am not arguing for a daily universal increase of wages. Of course you can’t pay someone more than they’re actually producing—unless they’re management. Actually, I should say, you can’t pay everyone more than everyone’s producing. But this is fundamentally different from demanding a minimum wage. I’ve no idea, a priori, whether a particular middle-class worker deserves to be upper-middle-class. But if someone’s working full-time, we must assume that they are producing enough to afford a roof over their head, good food and clothes, a kitchen table, perhaps; in short, a decent if frugal life. If full-time work doesn’t produce enough to buy these things, there is something wrong with the work and something wrong with the business.

They just demonstrate the nearly universally held fact that the market can only exist with the absence of fraud, theft and coercion.

Do you mean, the market functioning as described by economics? Because where do you plan to find a market anywhere in the world that isn’t tainted in some way by fraud, theft, and coercion? For instance, in America, businesses are affected by all sorts of noxious, coercive government regulations, as well as the beneficiaries of all sorts of noxious subsidies coerced from the salaries of middle- and lower-class workers by income tax. Has the market ceased to exist?

However, high margins are bad for buisiness. The specific kind of fraud that you describe is unlikely on such a grand scale.

We just disagree on what constitutes a high margin, I guess. Also what constitutes fraud; I think anyone getting paid millions of dollars a year is defrauding the people producing that wealth, because there’s simply no way he’s producing this much wealth by his own efforts. Probably this is not the legal definiton of fraud; I could call it stealing, but it’s not the legal definition of stealing either. Oddly enough, we don’t seem to have a word for it stronger than overcompensation.

(Some are even more than modest, there is a growing trend towards dollar CEOs. Steve Jobs of Apple Computers makes only a dollar a year he pays for his living through savings and continues to work primarily for the sake of the company.)

Well, that’s darn nifty, but it would be premature to call this business as usual. I don’t know about Steve Jobs, but I would guess that most dollar CEOs have somehow acquired enough savings that they don’t have to move back in with their parents in order to pursue their new altruistic lifestyle. In short, they have already accumulated a large amount of wealth by some means that I’d probably argue about.

Business management, if it wants to keep afloat, does not have as much power as you seem to think it does.

Shall we look at their salaries? That’s evidence enough of their power for me.

It’s not right to counter crimes that you only suspect exist.

This all began with me presenting evidence of abuse in a specific factory.

Also, the proper way to counter this kind of wrong is through laws and law enforcement, not economic incentives.

I agree, but we must take what we can get. I would not mind at all if several Home Depot managers went to jail for knowingly purchasing supplies from such a hellhole. But I’m not holding my breath.

OK, I’ll bite. Eminent domain in my home state (VA).

Amen, brother! Amen!

Also I believe that jacking up wages so some people can earn more money while the rest have to remain unemployed and the consumer suffers (not drastically in this case) is also unjust. So this boycott is unjust.

Ah ah ah—now why do the rest have to remain unemployed? Now you are really talking like the business is a charity. On that line of thinking, how can an individual boss allow anyone to be unemployed? Tom Monaghan, it seems, must leave his office of a Monday and comb the streets for the unemployed, offering everyone he finds a job, and if they accept, reducing everyone else’s wages so he can pay the newcomers.

I know it sounds like a horrid paradox; if 10 people are getting paid half enough to live, I’d rather 5 got paid enough to live and the other 5 got fired and paid nothing at all. But that’s because I don’t see us all as resting on this invisible, mystical market that cares for us and rules us (though it vanishes at the touch of evil); I see instead human beings that have obligations. If you can only employ 5 people justly than that’s what you do, and the rest are free to go elsewhere and do something else. And if your culture assures a minimum wage, then they know that whatever work they find will at least support them, unlike if they worked for you at half-pay.

You say:

But let’s focus on the anti-sweatshop bill. Were such a bill enforced, we clearly would have efficacious action!

You’ll need to prove this.

I described how I thought it would work, I’m not sure what other proof to give, if by proof you mean evidence that it already worked, because it’s a new bill. It hasn’t happened yet.

If you force people to raise wages you’ll have the same effect that I mentioned earlier. The changes in packaging also hurt and set the company back and didn’t help (but hurt) the employees.

How do you know? Maybe the packaging prevented waste. Maybe so much was getting destroyed as it traveled halfway around the world that the new packaging creates more wealth and thus (in theory!) higher wages. In fact, I highly doubt the company would have gone to all this trouble if they didn’t think it would create more wealth. That doesn’t sound like the market at work.

The said laws in the US don’t help much over here either. They are mostly feel good laws and we can afford them largely because our economy is so good that conditions wouldn’t be so much different if they didn’t exist.

What? What are you talking about? Are you familiar with American working conditions in the nineteenth century? And the early twentieth? I agree we have lots of stupid laws, but we also have laws that are obviously necessary because of how working conditions used to be in this very country.

(It’s also interesting to note that black urban people used to be much better off before the factory jobs they used to depend on were outsourced in the 70s and 80s so that companies could avoid said labor laws. Communities like Harlem which were once extremely prosperous are now ghettos infested with crime and crack dealers. A crappy factory job is better than no job at all.)

I don’t know about the specific case of Harlem or which labor laws you’re talking about. But there is crappy and there is abusive, and I’m trying to distinguish the two. And if we forbade the importation of goods produced in factories that did not meet our standards…well then, those companies wouldn’t have outsourced the jobs, would they? But again we’re muddling American labor laws, which are far too protective, and some basic minimum of labor laws that will prevent sweatshop conditions. I’m not saying we should forbid imports from any factory that doesn’t meet our personal maze of madness, only from those with abusive conditions. Ideally, we would have just the right, reasonable standards in our labor laws, in which case it would be perfectly just to forbid imports from other factories whose working conditions weren’t up to our own standards. (Though this still wouldn’t solve the problem of outsourcing, when, say, $1 of American money an hour is a decent minimum wage in a particular country.)

No, they’ll raise wages, lower employment and production,and reduce their total benefit to both the Chinese and US economies…

Either price will increase and thus demand will decrease, or supply will decrease. Either way, we’ll purchase less. Unless you count ‘any large amount’ to be plenty but the more we purchase, the better off they will be so I don’t buy this…

No, less total wealth will be given to the Chinese. Some select few will be better off but the rest will be unemployed.

You seem to have this assumption that the Chinese can’t do anything except work for American factories. I know I keep bringing up the agricultural tax that got revoked, but I think that’s a perfect example of the complexity of things. Yes, it’s quite likely that if factories producing for America raised wages, fewer people would work in them, and others would get fired. But they could go do something else. These people can still create wealth even if they’re not employed in a factory producing for us. And (as I keep saying) it is better to be unemployed in a situation where you are likely to get a minimum wage at your next job. We cannot enforce that in China, but our part is to encourage it by only dealing with those who, among other things, pay a decent minimum wage.

Also, I’m not sure you can prove that less total wealth will be given to the Chinese, at least if you mean dollars. Say we’re buying 100,000 of a particular widget for $1 each. That’s $100,000 flowing into China. Then the wages are raised to a sane minimum. That drives up the price to $2. Demand falls. Irate, we refuse to buy as many widgets from these uppity Chinese; we only buy 50,000. And $100,000 flows into China.

In order to increase the worker wage, one must increase the Marginal Productivity. To do this, one must either cut back on employment or increase amount and quality of capital.

Or repeal an abusive agricultural tax! Where does this fit into your equations? These people were artificially prevented from producing wealth on your their own land. When the tax was repealed, there was no influx of capital. But the people were able to start producing wealth. I suppose you could say the land was capital that had been taken away and was now given back, but my point is that there was suddenly all this wealth that was in no way dependent on foreign investment. We must demand that the people that produce for us are treated well; how the rest of the Chinese make their living is not, at least economically, our affair, though we might have a different obligation in charity. And perhaps they will do just fine without our capital.

If the reason the price in Vietnam was lower than in China was because the Chinese economy improved (as is the case now), it is because the Chinese no longer need the jobs as much as the Vietnamese. They can now be barbers and software engineers or whatever new job that drives wages up.

So do you have a moral obligation to buy from the people who pay their workers the least and (quite possibly) treat them the worst?

(There may be a good case made for charity here, where the American consumer, who is the real beneficiary of the lower wage, not so much the company which serves the conumer’s interests, could give out of his excess wealth to impoverished Chinese and others who are in dire need.)

Or he could simply pay a just price for the things in the first place! I fear you’ll make us all into mini-Carnegies, working our workers until they nearly drop dead and then slapping our names onto a beneficent workers’ hospital. If you admit that even the consumers are winding up with excess wealth at the end of this food chain, then blast it, how can there not be any profit anywhere along the line to be put into the minimum wages of the impoverished Chinese in the first place? This admission of excess wealth, courtesy the Chinese, undermines if not destroys your entire argument that it is impossible to raise wages without the gracious permission of market forces.

You’re welcome, I enjoy the debate though I think I’m spending too much of my time on it.

I do too, and thanks again for spending so much of your time on it. It’s a real pleasure to have some sharp discussion. Thanks also for your patience with my leisurely replies!

Bill Powell