Another By-the-Numbers Defense of Sweatshops

I attempted to leave a comment under "Help the World's Poor: Buy Some New Clothes," by an economics professor named Benjamin Powell. Since the comments system ate it (Database Error), I'm posting it here.

You can Google sweatshops+"best available alternative" and come up with thousands of hits for such by-the-numbers polemics.

I dealt with it extensively here.

Your celebration of the capital investment brought in by sweatshops is a classic example of Bastiat's broken window fallacy.

By definition, anything anyone does in a situation where there is a choice between more than one alternative is the "best available alternative." The question you should be asking is: why is the range of available alternatives so crappy in the first place? And a big part of the answer is the role of Third World states in carrying out land expropriations on the model of the English Enclosures, to drive peasants off their land and coerce them into the wage labor market. Third World states also play a major role in enforcing draconian restrictions on labor organization, tax their own people to provide subsidized road and utility infrastructure to offshored foreign industry, turn the peasants' confiscated common lands into industrial parks, and enforce the anti-market "intellectual property" [sic] laws without which the Nike model of outsourcing everything but marketing and finance would be impossible.

And Western capital is engaged in no small collusion with Third World states in guaranteeing a set of conditions under which workers accept employment on whatever terms are offered as the "best available alternative."

Western employers are engaged in parasitic activity, profitably selling crutches to people whose legs were broken by their partners in crime -- Third World states. (Never mind the role of the American state in backing death squads and military dictators to stop land reforms and make the world safe for corporate power, to subsidize the export of capital with World Bank loans for infrastructure, and to impose stuff like the Uruguay Round TRIPS Accords on the rest of the world).

You should be asking yourself how labor and capital would be directed in Third World countries if it weren't for all those broken windows.

Instead of praising sweatshop employers, we should be promoting a real free market agenda. Give the land back to the peasants it was stolen from. Privatize state industry by turning it into worker cooperatives, and privatize utilities and other services by transforming them into consumer co-ops -- instead of selling them off to a politically connected corporation. Repeal the WIPO Copyright Treaty and TRIPS, and withdraw ACTA from consideration.

Is the Regulated Monopoly Model Really So "Progressive"?

Under a Matt Yglesias column calling for the deregulation of casket-making, one commenter -- Mark. R -- argued that free entry and price competition were overrated:

This is waaaaay too simplistic. Easy example: go back in history and think about The Jungle and what the spate of food safety laws eminating from that did to “Mom and Pop” meat production and competition in general in that industry. Killed it b/c the large cartels were best structured to conform and comply with new food safety regulations. Obviously the cartels consciously used this legislation and the legislative process to help kill the competition. Yet this was all for the public benefit.

Sometimes a well-regulated industry with minimal competition is the best outcome. Think of “natural monopolies” — e.g. public utilities — from micro 101.

I attempted to post a response, but Matt's stupid comment system -- once again -- ate my comment. So here it is:

You could make a case (although I wouldn't agree with it) that regulated monopolies are a necessary evil in terms of their external effects. That is, in regard to minimal safety standards for some goods and services.

But in terms of their internal culture, they are clearly evils. The regulated monopoly model is a very poor approach to cost control, because of all the assumptions regarding institutional culture that are taken for granted by both the regulatory agencies and regulated firms. I strongly recommend Paul Goodman's contrast (in People or Personnel) between ad hoc, bottom-up, self-managed organizations and the hegemonic norm of the giant corporation or government agency. The latter has prestige salaries, Weberian work rules, management featherbedding, mission statements, and everything else that's pathological about pointy-haired bossdom. The regulated monopoly is likely to have a high-overhead, cost-plus culture very much like the Pentagon contractors, which gave us the $600 toilet seat. And by its very nature, as Seymour Melman pointed out in his analysis of the military-industrial complex, cost-plus pricing systems like those that prevail in "regulated monopolies" create very perverse incentives for cost maximization. You wind up with internal organizational cultures like something out of "Brazil." The regulators who set the prices for the "regulated" monopoly are unlikely to squeeze out such bureaucratic overhead and management self-dealing, because regulators and regulated are both middle-aged white men who went to the same schools, share the same general institutional culture, wear suits and carry briefcases to work, etc. So most of the stuff that inflates overhead and causes stuff to cost 300% more than necessary is stuff that they accept as normal and it never occurred to them to question.

Mark R.'s position is a classic example of mainstream liberalism's Schumpeterian approach, which I described in "Thermidor of the Progressives": Only the large, bureaucratic, hierarchical and managerialist organization can afford to be "progressive," because only it possesses the market power to price above marginal cost and thereby pass the costs of its "progressive" culture along to the consumer. So you have the ideal of postwar Consensus Capitalism, where it's OK that GM owns the entire economy so long as Michael Moore's dad has a good union job, and it's OK that the "professional" gatekeepers at the Big Three control everything you watch so long as they're constrained by a Fairness Doctrine.

What it amounts to is that the state imposes artificial scarcity rents and artificial capital and overhead costs on the performance of every imaginable function, and it takes several times as many labor hours to produce our standard of living than is technically necessary; but everybody has 40 hr/week jobs with good benefits (even though most of their work hours are the equivalent of digging holes and filling them back in, or extra steps in a Rube Goldberg machine).

C4SS Still Needs Your Help

Today C4SS director Brad Spangler posted an appeal for help. It seems the low contributions so far for the July-August fundraiser (only 10% of the target) have him in a panic. He announced plans to cut back on some projected expansions (like cancelling a Radio Liberty advertising campaign in September), and to put our new commentator Stacy Litz on unpaid leave.

Tom Knapp promised to give back $100 of his monthly media coordinator salary -- which is hardly even a pittance even as it is, considering he has painstakingly compiled a distribution list of many hundreds of newspapers for submitting each and every new C4SS column. Tom's doing the kind of stuff people get paid high professional salaries for, and I'd say his performance stacks up very well against that of the pros.

I'm not as dedicated as Tom (business has been slow at my day job, and that $425 really helps with the bills), but I'm gonna subscribe for a regular $20 contribution myself -- just as soon as I get some money in the bank so the deduction doesn't bounce (hint, hint). And contributor Jock C. has promised to up his monthly contribution from $25 to $50 if ten more people sign up for monthly contributions of $10 or more.

Now that we seem to be hitting a wall for the time being in terms of limits on our expansion, it would be really great if the monthly subscriber base started catching up with our budget. As it is, that $300 in monthly subscriptions is a nice cushion, as a head start toward each month's fundraising goals. If we could meet a much larger percentage of our total budget, and smooth out the peaks and troughs a bit with dependable income, that would be even better. And it's a lot less hassle to have a modest sum like $10 or $20 deducted from your bank account every month, and feel virtuously entitled to sit back and ignore the beg-a-thons ("I already gave at the office, thanks.").

I've said this before, but if enough people subscribe, we might be able to stop these fund-raisers altogether. I'll bet if everybody who's ever contributed signed up for $10 or $20 a month, we'd be pretty close to fully funded on an ongoing basis. Imagine -- I know, I'm repeating myself -- if Jerry Lewis promised to go away forever if enough people subscribed for regular annual donations. The millions of people rushing to put their checks in the mail would probably put him over the top the next day.

Since Brad made his appeal today, the contributions have reached 28% of the goal (for which muchas gracias). That means we have enough now, at the end of August, to pay everybody for the work they did in July. Every month when we start one of these things, I wonder if I'm going to wind up writing for free a major part of the time, if we've finally reached the point where people have had enough of coughing up money. And I'd probably keep doing it if the money stopped coming in, as would most of us at C4SS. I may be stingier than Tom Knapp when it comes to giving back money, but I'd still probably keep writing for free.

That's because we believe in what we're doing. We're not giving away prayer cloths like Benny Hinn, and we won't heal your hemorrhoids if you put your hands on the monitor. No matter how much you contribute, we won't help you rid yourself of alien engrams and reach a state of "clear." All we can do is keep producing columns, research papers, radio shows and podcasts promoting the cause of human freedom. If that's something you also believe in, and you've got the means to help us out, please consider doing so.

If you want to sign up for a regular monthly contribution, just click here.

At C4SS: The Friends of the "Free Market" Are Its Worst Enemies

At C4SS: Authoritarianism is Self-Defeating

At C4SS: Who's Really Being Naive?

At C4SS: The Cognitive Biases of Hierarchy

At C4SS: Economic Development Without the State

At C4SS: Unpaving is Progressive

Nina Paley: Competition is Stealing!

Unfortunately, given the Supreme Court's contorted view of "indirect effects on interstate commerce," I'm afraid somebody will actually try to make a serious case for this "argument."

C4SS July-August Fundraiser

[by Brad Spangler -- Cross-posted from C4SS.

Note: As Brad mentions, monthly income from subscription payments are up to $310. If enough people prefer to just subscribe for $10 or $20 a month and ignore the monthly fundraisers, we might actually be able to get by on subs alone and stop these begathons.]

Dear Supporters of the Center for a Stateless Society,

It’s time to start another fundraising drive to pay our expenses, but first I’ve got some news about changes at the Center and what we have planned.

Alex R. Knight III has, unfortunately, left from his position as one of our News Analysts in order to pursue other projects. He will remain a Contributing Writer for C4SS, though, so he’s not really going away as you’ll still see the occasional piece from him.

Although Darian Worden has been temporarily writing more to cover for the writing shortfall from Tom Knapp’s move to the Media Coordinator job, Darian will be starting grad school in September. As a result of the increased demands on his time, his workload for the Center will be dropping down to four weekly commentaries per month and two monthly occasional pieces.

At the start of August, though, we gained as News Analysts Stacy Litz and Ross Kenyon, two dynamic and committed student activists well known in the liberty movement. We’re expecting great things from them. You should see three Commentary pieces per week from Stacy and one from Ross.

If you’re not already aware, C4SS is one of the major sponsors of the Liberty on Tour project. Pete Eyre and Adam Mueller, both formerly of the similar Motorhome Diaries project, are touring the country in a giant black and gold RV doing libertarian meetups, activism and media work. Check out the Liberty on Tour web site:

http://www.libertyontour.com/

In September, we plan to carry out an advertising campaign on the Liberty Radio Network, including the shows Free Talk Live, Antiwar Radio, Thinking Liberty and Voice of Radical Dissent. Our goal for this is to raise our overall profile within the movement, conduct outreach to people newly discovering anarchist ideas via libertarianism and build an even bigger readership and base of support for future growth in our operations. I believe Liberty Radio Network meets that need and allows the money we spend to do double-duty, supporting existing radical libertarian media. Check out the Liberty Radio Network web site:

http://lrn.fm

We had placed Mariana Evica in a volunteer role as both our Development Specialist and Social Media Specialist earlier this year. Unfortunately, her availability has suffered during that time despite a promising start. That difficulty is coming to a close. Starting in September, she will be starting as a paid contractor for the Center at $8 per hour for 20 hours weekly. That expense isn’t coming out of this fundraiser, but the additional cost and additional capability it brings to promote our content show one reason why we want to launch the advertising program now, first.

I’d also like to mention that I will be speaking at the Libertopia conference this October. We plan on making an effort to have a nice presence there and will be needing your support for that as well. Here’s the Libertopia web site:

http://www.libertopia.org/

All of this requires your support. Because of the unique and new expenses these past two months, as well as the timing of some of these developments, I’ve made the decision to combine our July and August fundraiser into one single drive. Our fundraising goal is a challenging $4522 that we’re looking to raise by September 17th at the latest.

Below, I’ll show you our financial information, but if you don’t want to get into that please, right now, go to our web site and click on the ChipIn widget to donate. We need your support.

http://c4ss.org/

Here is how the $4522 goal for the July-August fundraiser was arrived at:

——————

July-August Fundraising Drive — Finances

INCOME

July Income
$310 recurring donations
$200 part of 2nd session course fees, Stateless U.

August Income
$310 recurring donations
$200 part of 2nd session course fees, Stateless U.

Total July-August Income: $1020

EXPENSES

July Expenses

Research Associate: Carson — $425
News Analyst: Knight — $160
News Analyst: Worden — $260
Feature Editor: Morgenstern — $100
Web Administrator: Gogulski — $215
Media Coordinator: Knapp — $640
Director (Stipend & Expenses): Spangler — $120
Liberty on Tour (ad package and promotional materials) — $792

Total July: $2712

August Expenses

Research Associate: Carson — $425
News Analyst: Worden — $260
News Analyst: Litz — $300
News Analyst: Kenyon — $150
Feature Editor: Morgenstern — $100
Web Administrator: Gogulski — $215
Media Coordinator: Knapp — $640
Director (Stipend & Expenses): Spangler — $120
September LRN Ad Package — $620

Total August: $2830

Total July-August Expenses: $5542

Fundraising Target (Expenses minus Income): $4522

——————

And there you have it. Those are the numbers. This is what we have been and will be doing — but only with your support. Please donate using the ChipIn widget on any page of our web site.

http://c4ss.org/

Please support our work. Then get your friends to support our work.

Regards,

Brad Spangler,
Director, Center for a Stateless Society (C4SS)

At C4SS: You Don't Own Other People

At C4SS: Why Networks Defeat Hierarchies

At C4SS--Haystack: Resistance Technology Without Borders

At C4SS: Government War on Wikileaks? Bring It On

At C4SS: In Praise of "Bad Attitudes"

At C4SS: The Corporate Alarm Clock