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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Tuesday, August 31, 2010

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.

8 Comments:

Anonymous Roderick T. Long said...

Hi Kevin,

I went to Ben's website and posted a link to your piece here, so you may get a response either here or there.

By the way, this is the same Ben Powell you've cited here.

Roderick

September 01, 2010 7:28 AM  
Blogger Kevin Carson said...

Thanks, Roderick. So he channels the good side of The Force, as well?

September 01, 2010 7:51 AM  
Anonymous Roderick T. Long said...

Hey, it works for Cade Skywalker. :-)

September 01, 2010 8:58 AM  
Anonymous Benjamin Powell said...

Kevin,
I always channel the good side of the force.
I have some disagreements with the particulars in your concluding paragraph but I mostly recognize and agree with the general spirit of your objection. However, I don't think it undermines my position in the least.
I agree that these countries are poor because of their awful governments that oppress the people and limit their opportunities. I agree that in SOME cases individual employers may corrupt the government to get favorable access to labor or land and limit their competition. I, of course oppose this sort of state "capitalism." Those actions should be protested.
But the vast majority of sweatshops are smaller domestic subcontractors who aren't a major reason why their governments create bad rules. They are just people who make a profit on the existing situation. In doing so, they improve the lives of those they employ. Yes there is background injustice, but it is by and large not an injustice caused by the employers and that will continue to exist regardless of the actions of an individual employer.
So I'm with you that we should oppose many of the policies of these regimes (or oppose the governments themselves, note my stuff on Somalia). But at the same time we shouldn't abstain from buying products made by these people (or worse imposing government regulations limiting their access to import to the US). That only increases the harm these poor people suffer under their unjust regimes.
So leave the dark side of the force and come and "join me."

Ben Powell

September 01, 2010 11:20 AM  
Blogger Kevin Carson said...

Thanks for the comments, Ben. But the side you're speaking for really does sound suspiciously like the Trade Federation.

While most sweatshops are independent contractors under the Nike "outsource everything" model, whether the principals like Nike and other Western-headquartered TNCs are in collusion with local governments is a different question.

And buying sweatshop goods is of limited benefit, because the vast majority of the price you pay is a brand-name markup -- embedded rents on an artificial property right that goes to Nike or whomever, rather than to the sweatshops.

Far better for everyone would be a relocalized economy of small-scale manufacturing for local markets -- in both the West and in China. The best way forward for Chinese job shops is suggested by the Shanzhai manufacturers who are starting to make high-quality knockoffs of patented Western goods, identical to those they make on contract for the TNCs. I'd love to see sweatshops contracted to Nike start disregarding Nike's trademark, sell an identical sneaker with the "Swoosh" in a circle-and-slashbar to the local population at a fraction of the price, and double their workers' wages. Now *that* would be a genuine free market economy. Some Wobblies "salting" the sweatshops, a la Doctorow's "For the Win," wouldn't be a bad thing either.

As a matter of fact, the growing number of container ships rusting in port thanks to fuel prices and the decline of Western demand mean that the Chinese government is starting to seriously rethink its original sweatshop model of industrial development and consider instead the model it originally rejected: increasing domestic demand and gearing production mainly to the local market. I'd like to put them under more pressure to do just that.

September 01, 2010 12:50 PM  
Blogger Obnoxio The Clown said...

"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."

If the statement asserted so blandly above is true, then of course you are quite correct.

However, in the handful of third-world countries I've visited, I've never seen any evidence of it. It certainly appears to be an emotive argument, and one for which you offer little evidence.

Have I missed something?

September 02, 2010 8:06 AM  
Blogger Matt Zwolinski said...

Interesting post, Kevin. This is an issue I've been interested in for several years, and I'm actually finishing up a paper just now on the sweatshop debate and the relevance of the sort of background injustices you discuss here.

One of the problems with the sweatshop debate, it seems to me, is that we conceptualize it as "the" sweatshop debate - as though there were only one question to answer: are sweatshops good or bad? That, I think, is a far too simplistic way of getting at the issue, and people on 'both sides' are guilty of falling into it.

In reality, there are a lot of moral and political questions we can ask about sweatshops, and the answers don't line up neatly on two sides of a political divide. One question we can ask is whether consumers should continue buying sweatshop-made goods, or whether such goods should be boycotted. Here, I think Ben's got it right. Sweatshops provide a benefit to their workers given their background circumstances, however unjustly those circumstances may have been produced. Hurting the sweatshops without changing those background conditions isn't doing anybody any favors.

Another question we ask is what sort of political reforms ought to be made to deal with sweatshops. Actually, that's probably several questions disguised as one. We can ask what political reforms ought to be made ideally - maybe we'd like to see the world remade along mutualist anarchist lines. OK. But since that's not going to be happening anytime soon, what sorts of political reforms should be made in the meantime? There are few topics where the distinction between ideal and non-ideal theory play a more important role than in the sweatshop debate I think.

Both of these questions, incidentally, are distinct from the question of whether sweatshops or the MNCs with which they contract are acting in a blameworthy manner. In your post, Kevin, you suggest that Ben is mistaken in praising sweatshop employers. But that depends, it seems to me, on whether those sweatshops/MNCs were responsible for the unjust background conditions you cite. If you're drowning in a lake because you overestimated your swimming skills, I do you no wrong by offering to tow you to shore for $100. Things are quite different if I was the one who threw you in the lake to begin with. (Are things different if some other person, with whom I have no relationship, threw you in the lake?)

September 02, 2010 8:09 AM  
Blogger Kevin Carson said...

Obnoxio: You haven't seen any evidence, among other things, of the hacienda system in Latin America, with most of their land -- held pursuant to land grants from the state -- held idle when there are landless people nearby? You haven't seen any evidence that the British drove the native population off the best twenty percent of the land in Uganda?

Matt: But the question is further complicated by the sweatshop employers' current relationship to transnational corporations, and whether our purchases are contributing mainly to the welfare of the TNCs that charge enormous brand name markups. For every dollar you spend at Nike, a dime or less probably goes to a sweatshop worker, and ninety cents goes toward encouraging an unjust system of power to continue. That sounds an awful lot like funnelling aid through local kleptocrats.

September 02, 2010 8:43 AM  

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