April 6, 2011

More than One Opinion on Sweatshops

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Cornell’s vibrant labor activism presents a consistent narrative: Vast multinational corporations exploit the world’s poorest people, subjecting them to the modern equivalent of slavery, while, at the same time, outsourcing the manufacturing jobs of countless working-class Americans.

Despite its heart-wrenching and well-intentioned appeal, this emotional narrative disregards the socioeconomic realities of international free trade and globalization. Not only has globalization propelled vast increases in American standards of living for decades, but it has also lifted hundreds of millions of the world’s poor from the grinding destitution of rural poverty.

As manufacturing jobs have shifted overseas, Americans have quietly reaped the benefits of post-industrial economic progress. In fact, according to a study led by Dartmouth professor Matthew Slaughter, a former member of the Council of Economic Advisors, for every job outsourced by American multinational corporations between 1991 and 2001, these very same American corporations hired two American workers (2.8 million vs. 5.5 million respectively). These new jobs pay better (according to the same study, as much as 31 percent better) and reflect the global economic shift toward a knowledge economy in which everyone can benefit.

Yes, both drinking “fair-trade” coffee and wearing exclusively American-made clothes satisfy the moral sentiment of inequality conscious upper- and middle-class American consumers, but free trade is a tried and established economic principle that has enabled boundless economic opportunities for the world’s poorest people.

What is derided as “sweatshop labor” represents perhaps the only method of escaping poverty for the world’s poorest people. In the world’s most dysfunctional countries, corrupt governments and very ineffective foreign aid have done little to improve destitute living conditions, magnifying, in contrast, the unintended benefits arising from multinational corporations’ self-interested pursuit of cheap labor.

Opposition to the anti-sweatshop and the “fair trade” movements is not a tired regurgitation of laissez-faire dogma or pro-business partisanship. The positive effects of free trade on world poverty are understood as part of a broader bipartisan effort that should never be reduced to the petty left-right squabbling which dominates any conversation on American politics.

Indeed, Pulitzer Prize-winning columnist Nicholas Kristof and famously liberal economist Paul Krugman represent two potent voices noting sweatshops as perhaps the only means for economic improvement in the developing world. In a New York Times article from 2000, Kristof details the relationship between sweatshop labor and the explosive economic development of China, where ultimately “sweatshops tended to generate the wealth necessary to solve the problems they created” (“Two Cheers for Sweatshops”). He later outlines the consequences of sweatshop labor in China: a five-fold rise in factory wages and drastically improved labor conditions as a result of increased competition.

By 2011, a rapidly growing middle class population of 300 million has arisen in China, now the world’s second largest economy, much the result of their ’80s and ’90s-era sweatshops and free trade policy.

In an article for Slate (“In Praise of Cheap Labor”), Paul Krugman explains how, given their lack of capital, the greatest competitive advantage of developing nations is their capability to provide cheap labor, meaning that regulating better working conditions disincentivizes vital industrialization from the outset. Following this line of reasoning, the message of the anti-sweatshop movement serves only to undermine the very individuals it so passionately claims to support.

This is confirmed not only by the explosive growth of countries like China, South Korea and India, but also by Western economic history and the previously unrealized potential for a robust middle class. It is perhaps ironic that the very individuals who most benefited from this model of development often lead student movements against sweatshop labor abroad.

Importantly, this is not to argue that labor abuses do not occur, nor that sweatshops don’t have outrageous working conditions in which many suffer or risk death. Despite such conditions, legitimate alternatives are scarce-to-nonexistent and, as is evident in modern China, such brutal conditions have reliably subsided once certain thresholds of competition and growth have been met. The alternative is to prevent the world’s poor an opportunity to escape the starving grind of rural poverty, miseries long forgotten by modern Americans.

Despite the well-intentioned enthusiasm of Cornell’s anti-sweatshop activism, Cornell’s student body is not of one mind regarding free trade and “sweatshops.” In this spring semester on Cornell’s campus, a group of global poverty-conscious students established Students and Workers for International Free Trade as a bipartisan reaction to the “fair trade” and anti-sweatshop movements. In the future, Cornell students can expect regular campus discourse on related topics, with Tuesday’s Intercollegiate Protest of the Farm Bill and heated debate on the morality of “sweatshops” as excellent examples of growing free trade activism at Cornell.

Yet, free trade activism isn’t merely about raucous debates or energetic protests. It is about finding the best methods for delivering hundreds of millions of people from grinding poverty and starvation. Only by properly understanding human incentives and economic history can humanitarian efforts possibly confront the developing world’s stubborn levels of poverty, starvation and inequality.

It is time that Cornell students acknowledge the existence of two humanitarian perspectives on issues of such great consequence.

Jacob Arluck is a freshman in the College of Arts and Sciences and the co-founder of SWIFT. He can be reached at jea87@cornell.edu. Guest Room appears periodically this semester.

Original Author: Jacob Arluck