Matthew Henry John Bartlett

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Wednesday 13 February, 02008

NZ heart China heart US

by Matthew Bartlett @ 7:59 am

Jeanette Fitzsimons on swapping water with China
BBC4 documentary on Freud’s nephew inventing consumer culture
a. what a bastard. b. why did everyone dive straight in?

7 Responses to “NZ heart China heart US”

  1. richie_f says:

    Re Jeanetee’s speech and oppression of China’s workers, isn’t it good if we buy the things China produces (leaving aside the health implications of Chinese ‘fruit juice’ which I imagine is not heavily represented in China’s exports to us)? Buying up Chinese goods drives up demand, increasing employment and wage levels over there.

    ‘Not free to withdraw their labour’ is a tricky phrase which suggests slavery and exploitation. As does ‘equivalent of slave labour’. The reason that Chinese workers are ‘not free to withdraw their labour’ is that the alternative is for them to be unemployed and destitute. I don’t condone genuine exploitation — eg locking workers in or requiring them to work 120-hour weeks. But if Chinese industry means workers are safe, at liberty to physically leave, not overworked and able to feed themselves (which would not otherwise be the case) then it is good for the locals. ‘Not free to withdraw their labour’ in this context just means ‘can’t get a better job and won’t get paid if they quit’.

    Leaving aside environmental issues, the answer to this problem is not to cut off trading with China because (a) their stuff is crap, and (b) workers aren’t well off. The answer would seem to be to support Chinese industry by buying their goods, which will increasing demand and improve their employment levels and working conditions. (Interestingly, this approach is at odds with the Green’s ‘buy Kiwi made’ campaign.) We should also reward good workmanship and good environmental practices by choosing appropriately.

    In any case, as tempting as it is, I’m not sure it’s the right idea to compare what we earn with what they earn and conclude Chinese are being exploited. Relative cost of goods is one thing to consider. Also, I’m not sure it’s ideal to measure how well-off people are against Western standards of wealth and modes of living. Just because people don’t have a 35-hour working week and money to spend on wining, dining and fancy clothing, it doesn’t mean that they are being exploited.

  2. Matthew says:

    Thanks for your comments, Rich, but I respectfully submit that you’re completely wrong.

    Yes by definition buying more Chinese goods drives up demand. But is there any reason to think wages go up too? Out of the goodness of his heart a Chinese boss might share the wealth around, but he might just as well (maybe even more likely) continue to pay the minimum possible.

    Sometimes workers are locked in, and there’s no way for us to tell if the imported things we buy were produced by locked-in workers. Or even if they were produced by e.g. a Chinese Christian in prison for running a house church. Nor is there any way to tell if the thing I bought involved unstewardly treatment of their natural environment.

    Our system of provisioning ourselves is stupid (maybe evil) because it hides most of the information we need to make responsible choices.

  3. richie_f says:

    Yeah those are fair comments; there is no doubt that there is some genuine exploitation going on. I confess that I have no idea what proportion of workers are mistreated.

    I have spoken to people who contract production of components out to China, who have been on the factory floors and talk about workers having breaks and working manageable shifts.

    Increased demand means more employers and employers who are hungry for staff. This means employers are more interested in treating and paying staff better because the labour market is competitive. They don’t have to be benevolent for this to happen.

    Restricting trade with China would have the reverse effect.

  4. dennis bartlett says:

    points win to Richie on this one Matt

  5. D says:

    and… there you have it – the invisible hand of the market moves mysteriously and works its magic, creating a better world.

    And of course there are always teething pains on the way to a better world – it’s unavoidable, I don’t know why you let such little things worry you Matt! In a few generations this will all just be the memory of a memory…

    or not…

  6. richie_f says:

    Yo D,

    1. I prefer not to use the terms ‘invisible hand’ and ‘magic’ when discussing supply/demand–they make it sound like the theory is all just mumbo jumbo and nonsense. Or was that a deliberate device?

    2. I’m not suggesting that the market always creates a better world, just that it exists, and that the effects changes in demand should be considered when answering the question ‘what should we do to create a better world?’.

    3. I don’t understand what teething pains you have in mind. It seems unlikely to me that an increase in demand for Chinese goods could make Chinese worse off.

    FWIW.

  7. D says:

    Heeeey! Richie!

    Feeling chatty, so here goes:

    1. Ahem – it is of continuing sadness to me that hardly anyone gets my allusions :-(. It was a reference to Adam Smith’s “The Wealth of Nations” which is in many ways a compilation of the fundamental tenets of western economic theory since the 19th century. To quote (thanks to Wikipedia):

    BOQ As every individual, therefore, endeavors as much he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an *invisible hand* to promote an end which was no part of his intention. EOQ (emphasis mine)

    In capitalist economic theory, this invisible hand, delivers the “best results” to society, irrespective of the intention of the person who – individually – labours out of self-interest.

    Somewhat later this was used to promote the idea that greed was good – so, for instance John Maynard Keynes said:

    BOQ For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. EOQ

    Keynes wrote this in a context of market mechanisms – the invisible hand would result in the elimination of poverty after which we could regain our morality but until then it was best to let the market’s invisible hand bring healing.

    Somewhat later and even in our own day (in the economics of the disciples of Milton Friedman for example), this approach to economics (self-interest leading to societal goods) via the “invisible hand” appears to have been implicitly used to justify a lot of quite actions and policies I would consider unacceptable. Much greed (and evil generally) can be justified by a belief that a good naturally results from it.

    2. Sure the market exists, but markets predispose people to certain ways of acting, living and being in relation to others.

    Markets, viewed as mechanisms (natural mechanisms which should not be interfered with, which is a common view) without restrictions, controls or courts of appeal tend to run roughshod over people, the environment, cultures, traditions, the best interests of local communities and individuals etc.

    Partly this is to do with their construction – actions by anonymous people tend not to promote strong moral considerations (ever had that feeling of pleasurable anonymity at a work conference in a foreign country, that feeling that whatever you do doesn’t follow you home?).

    These influences also should not be overlooked.

    3. On the contrary, I am in exact disagreement.

    It seems highly likely that an increase in demand for Chinese goods could be damaging for the Chinese people.

    By teething pains I am referring to, say,

    * poor conditions for, say, Chinese workers in sweatshops, who often leave a rural area and its culture and traditions in the hope and dream of a better life, only to find they have to work very long hours for poor (and often overdue) pay while having very little individual or collective bargaining power.

    * I can see an increase in demand for Chinese goods resulting in further damage to the environment in China which has already resulted in the extinction of important species (e.g. the Yangtze river dolphin). In doing this, they are robbing the environment of its natural capital and stealing from future generations. Additionally, look at the environmental impact of the Three Gorge Dam (information which has only relatively recently become available), look at the injustices suffered by the people who were shifted.

    * I can see an increase in demand resulting additional stresses, strains and abuses of power by existing employers in order to maximize their dollar in a highly competitive market.

    Just rambling… What think ye?

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