The Global Impasse

Emily Tranchina (HB)

     “It’s a small world after all.”

     Mary Poppins raises a valid point. The world is growing smaller, in fact rather than enduring the constant thrum of propellers, waves, feelings of seasickness and dizziness on an ocean liner for two weeks, all I have to do is pay a sum in exchange for a plane ticket- and voilà!  I can start visiting with my cousins in the comparatively short period of 9 hours and 20 minutes.

However the act of visiting my English cousins is beside the point. What is the point is what I brought them in order to make up for my missing their important life events- trendy clothing, American DVD’s and other electronics. Let us say that I gifted them the newest hit show in America –Orphan Black– as well as a fashionable T-shirt. In my flying to London, I have added an extra 4,759 miles to the total distance said objects have traveled in order to rest in the clammy palms of my tween cousin.

But I’m cheating my cousins. They’re not getting American goods, they’re getting goods imported to America and then manually exported by moi. If I recall correctly, the T-shirt was made in Bangladesh. At the time of purchase it did not matter to me how the shirt and I came to be in the same room – the conditions it was manufactured in (the environment as well as the wages paid to the person who stitched the cloth into its trendy shape), the environmental impacts of transporting it and its differently sized clones across the Pacific Ocean- just that I was able to purchase it at a low price.

Now having taken 13- today 14- days of Macroeconomics classes I can say with full confidence that I have a barely rudimentary understanding of the subject. I understand the logic of being a businessman (or woman) looking to cut costs in the factors of production – in this example: wages – and still being able to sell the same demanded quantity, at the demanded quality at an agreed upon (equilibrium) price to the consumer (yours truly) in order to maximize profits. In learning about cost-benefit analysis, the theories of absolute -whoever is the best at producing product overall- and competitive advantages -whoever may produce it at the lowest opportunity cost- I logically understand the decisions of CEOs to outsource labor to, and or, to build factories in to other countries. By those laborers working there American laborers have more opportunities to specialize in a product that we have a lower opportunity cost in manufacturing.  And by both countries – in this case Bangladesh and the United States – specializing in one product and trading with each other, there are more T-shirts available to consumers at a lower cost – comparative advantage- (compared to what the cost would have been had the T-shirts been produced in the same country of their purchase- absolute advantage). Now imagine this on a global trading system, where everyone has something that somebody wants – be it labor, land, capital or entrepreneurship.  In outsourcing, everyone wins:  the producer and the consumer are happy with the end result that being more money and a fashionable shirt respectively.

Clearly there is a competitive advantage for the consumer and producer. However, is there also a humanitarian advantage for the person who created the shirt? Is that person having their lot in life increased by producing a shirt in sweatshop conditions?

Granted it is an extreme example, but stay with me. In the long term, the answer is yes; while in the short term answer is both yes and no.

As Benjamin Powell states in an interview by Dallas Morning News, workers are being paid more than if the jobs were never outsourced – this is a logical conclusion that obviously cannot be refuted; however, it should also be considered how the wages that now exist (due to a rising employment rate in Bangladesh) are being put to use by the country and its citizens. Are they being invested to increase “the [country’s] low level of economic development”? If not, then the outsourcing of jobs is not only harmful to workers in America, but also unnecessarily harmful for the workers in Bangladesh – as they are suffering for a pittance, and said pittance in being spent on necessary goods and services which enable the Bangladeshis (no I did not just have to look that up) to continue their labor, but do not raise the overall economic development. I use “development” to indicate the increase of individual investments in Bangladesh and the resulting increase in Bangladesh’s involvement of global trade for another factor of production other than cheap labor. However, if the outsourced wages did lead to this economic development, this increase in GDP, the suffering of sweatshop workers would be worth the wages that they earned, spent and or invested in companies originating in Bangladesh.

Extrapolating from this increase in the GDP, the result of “the best of their bad options” according to Powell, I would say that as the real GDP (Gross Domestic Product accounting for currency inflation) increases so does the standard of living in the country. This much is obvious from the study of history as Powell so clearly points out, The United States and Great Britain in the early 1900s, had the same “low-wage, dangereous manufacturing” economies and are now flourishing economies. Powell also highlights similar “sweatshop-countries in 1960 – Hong Kong, Taiwan, South Korea – are all first-world countries today” suggesting that the globalized economy has allowed for rapid development in third-world countries. (Which it has)

Now keep in mind that this is assuming that the workers in Bangladesh are in the sweatshops making T-shirts freely, and they are investing (read spending) their money in businesses based in Bangladesh. If they are not, then not only is their labor an infringement on the most important human right -according to myself and Pope Leo XIII – “free will,” but their suffering is for naught but the profits of a capitalist. Here we see the validity of the Marxist class-struggle perspective which demonizes the modern day capitalist. The “exploitation of the labourer by the manufacturer,”- in which the manufacturer/capitalist is a member of “the bourgeoisie,” who also steals the slave’s, or “proletariat[‘s]”  wages in various other methods.

So what would a Marxist say of sweatshop-economies? To the extreme case? What about  proletarian suffering but is rewarded?

First we must consider the end goal of Marx and Hegel as suggested in the Communist Manifesto: total equality, where nobody has an advantage or disadvantage in comparison with his neighbors. On principle this is sound, but once one begins to consider the implications –communal property – one must conclude that it is politically and economically unsustainable. Even if one hasn’t so concluded, I sure have. If all people were to be paid the same – which a communist/socialist/Marxist would suggest as a solution for the Bangladeshi workers in sweatshops – it would lead to stagnant, meager economies, as there would not exist an extra “reward” for employing the spirit of innovation and creativity in entrepreneurship. Translation: the services provided by a neurosurgeon – with all his years of education- would be worth as much as the services of a pool-side towel boy – a high school dropout.

What would a Utilitarian say of the same situations?

My response is based off the imaginatively titled Utilitarianism and written by John Stuart Mill. A quick summary of utilitarianism for those of you who fell asleep in class: the total good experienced, or pain avoided from this action by all determines whether I should do it or not. We must also consider what time frame of this total utility is to be considered. If the timespan is short, the utilitarianist is likely to be against the outsourcing of jobs; however if the timespan is long term (all other things equal), they would be likely to affirmatively practice their “[kingly]” role in the capitalist economy (von Mises).

Again this is working on the assumption that I, the “king,” care about how the T-shirt came to rest in the bottom of my suitcase. If not, then I have failed the Aristotelian school of thought which says that my end goal should be the attainment of happiness for all people in my “polis” (Aristotle). Taking into account the wise words of Mary Poppins, my polis is considerably larger than Aristotle could have ever expected, yet, I know that if I strived for this goal I would condone the practices of capitalism. My approval hinges on the condition that the Bangladeshi’s lot in life improved sufficiently so that they could lead a contemplative and governmentally active lifestyle. If not, I would not cast my affirmative “vote” in the democracy of the global economy; rather, I would boycott the good, despite that in boycotting, I am “[taking] away the best of a bad set of options” (Powell). To this point, I would, with billowing toga, assert that it is better for man to live a Spartan existence than to willingly perpetuate one which makes the attainment of happiness more difficult for any citizen (read human being with a pulse) of the polis.

So what should we conclude about outsourcing jobs to countries where sweat-shop economies exist? So what should we do? Choose one and ignore the suggestions of the others schools of thought?

That’s the problem with philosophies, there are too many of them, and oftentimes they are impossible to reconcile with each other. No. I say that we should take a “philosophy buffet” route. Regardless of the end result, our short term goal should include an increased global awareness of conditions in third world countries and our long term goals: the creation of an organization similar to the UN that ensures countries using such conditions have the appropriate rising standards of living to justify said conditions.

We may be entirely different people, but we all have the capacity to reason. So I challenge every person that reads this to take these words to heart, consider that the world is really so “small after all” and that you should fully actualize your defining faculty: your ability to be logical, and yet at the same time, emotional as we human beings are of a “[compounded] nature” and should thus be considered.

References

Chase, D. P., & Smith, J. A. (1911). The Nicomachean ethics of Aristotle. London: J.M. Dent ;.

Jowett, B. (1943). Aristotle’s Politics,. New York: Modern library.

XIII, P. L. (n.d.). Leo XIII – Rerum Novarum. Vatican: The Holy See. Retrieved June 25, 2013, from http://www.vatican.va/holy_father/leo_xiii/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum_en.html

Hansson, C. (Director) (2013, June 5). Macroeconomics. Macroeconomics PM. Lecture conducted from Ursuline Academy of Dallas, Dallas.

Marx, K., & Engels, F. (1967). The Communist manifesto. Harmondsworth: Penguin.

Mill, J. S. (199). Utilitarianism. Raleigh, N.C.: Alex Catalogue.

Mises, L. v. (n.d.). Liberty and Property by Ludwig von Mises. Ludwig von Mises Institute : The Austrian School Is Advancing Liberty. Retrieved June 25, 2013, from http://mises.org/libprop.asp

Mitchell, J. (2013, May 19). In defense of sweatshops. The Dallas Morning News, p. 5P.

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