Running Shoes Not Oppressive

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Running Shoes Not Oppressive

By: Pete Geddes
Posted on July 04, 2001 FREE Insights Topics:

I just got a pair of running shoes. They're great-lightweight and reasonably priced. A buddy commented, "Bet they're made in some third world sweatshop. You shouldn't have bought them". I'm concerned about people making products under conditions I deplore. But will boycotting the company help anyone? I believe not. Here's why:

Reacting to millions of products like my running shoes, Amnesty International recently blamed third world environmental and human rights abuses on "globalization". They want to arrest the spread of the market economy and modern technology. But their angst over real and contrived problems of globalization would be lessened if they asked one question: "compared to what?"

Poor peasants are desperate for employment. They seek jobs we condemn. A compelling example comes from the Atlantic Monthly's piece, "The Shipbreakers", a story of India's peasants tearing apart ships by hand:

"It was a punishing and dangerous procedureĊ .The workers were quite obviously exhausted by it. Some Ċ were slowly starving, trapped in that cycle of nutritional deficit all too common in South Asia, by which a man may gradually expend more calories on his job than his wages will allow him to replace."

Anyone not bothered by this has no heart. But here's a brutal fact: However miserable the conditions, these workers were better paid and safer than their rural counterparts. They find even this shipbreaking preferable to their current alternatives.

Regular income allows at least some of their children to attend school rather than stooping in fields or foraging in dumps. Consistent employment increases skills, discipline, and capital accumulation. These, in time, yield better jobs at higher wages. Higher incomes develop the social infrastructure of schools, roads, and hospitals. Finally, when per capita income rises to approximately $5,000, the search for environmental quality begins.

For those in third world nations, miserable jobs with poor wages are the only reliable paths out of poverty. These jobs simply wouldn't be created if wages and working conditions were at our levels. Poor countries are poor because of low productivity, bad infrastructure, and rampant political corruption.

These countries compete in world markets only if they pay wages far below those in the West. While complaining and condemning may make us feel righteous, those who seek to restrict the markets for third world exports lock the poor into poverty.

In 1993 child workers in Bangladesh produced clothes for Wal-Mart. Senator Tom Harken proposed legislation banning imports from countries using child labor. Factories stopped employing children. And then what? The international aid organization Oxfam followed up and found many children had moved into even worse jobs, e.g., scavenging garbage dumps and prostitution.

The transition from traditional agricultural societies to the Industrial - Information Age implies costs. In Western countries, the process took hundreds of years; developing nations accomplish this feat in decades. Wealthy nations can and should support institutions that ease the transition. For example, the Ford Foundation supports RUGMARK, a consortium of carpet manufactures and exporters in India, Nepal, and Pakistan. It works with Western importers to assure that no child labor is used in the production of hand-knotted rugs. Children attend RUGMARK sponsored schools and are enrolled in after-care program until their parents return from working their loom.

International aid can help, but money alone is not sufficient for success. Economic progress requires the creation of a "civil society" and the rule of law. Social and human capital are nurtured and sustained. Laws must reflect these norms and governments must enforce them fairly. Without these, human rights and the environment suffer. Success comes when people are rewarded for creating value, not for transferring wealth via force or fraud.

In environments of rampant corruption and political instability, value creating institutions aren't sustained. Political plunderers, not the market process, keeps countries poor. For example, at its independence from Britain in 1964, the African nation of Zambia had a per capita GNP of $600. Today it's $309. The World Bank estimates that if all the money directed to Zambia since independence had simply earned a normal rate of business return (7 to 10 percent), today Zambia's per capita GNP would be $20,000.

Global capitalism does bring social stress. However, a technologically robust, market-based economy raises living standards ever higher, faster, and more inclusively than any other system. Developing countries make as much progress in thirty years as industrialized nations did in a century. Critics who ignore these benefits and blindly fight globalization hurt those who most need economic progress.

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