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Edited on Fri Feb-27-04 11:55 AM by KevinJ
So is supporting sweatshop labor in China to provide inexpensive goods a positive thing? This is what I never understand about the free trade approach. It sounds good in theory if all nations were equally prosperous: at that point, Malwart couldn't hire people in China for slave wages and threaten to fire them if they complained about the horrific working conditions Malwart imposes upon them. But the reality is that sweatshops do exist and are likely to continue to exist as long as there are poor people in the world who have no better alternatives. Under such circumstances, deregulating trade only serves to legitimize the flow of wealth from poor countries to rich countries. For instance, do any of us here seriously doubt that starving peasants in the Amazon rainforest would cheerfully sell the forests in which they live for a fraction of their market value? Great, so we get cheap lumber, but what do they get, apart from the destruction of their environment?
I was reading recently what I thought was a very succinct and on-point criticism of free trade offered in 1931 by Yugoslav Foreign Minister Malinkovic:
The fact is that apart from economic considerations there are also political and social considerations. The old "things-will-right-themselves" school of economists argued that if nothing were done and events allowed to follow their natural course from an economic point of view, economic equilibrium would come about of its own accord. That may be true (I do not propose to discuss the point). But how would that equilibirum come about? At the expense of the weakest. Now, as you are aware, for more than seventy years there has been a powerful and growing reaction against this theory of economics. All of the socialist parties of Europe and the world are merely the expression of the opposition to this way of looking at economic problems.
We are told that we ought to lower customs barriers and even abolish them. As far as the agricultural states of Europe are concerned, if they could keep the promises they made in 1927, and could carry that policy right through, we might perhaps find ourselves able to hold our own against overseas competition in the matter of agricultural products. But at the same time, we should have to create in Poland, Romania, and Yugoslavia the same conditions as exist in Canada and the Argentine, where vast territories are inhabited by a scanty population and where machinery and other devices are employed. We could not sacrifice our people by shooting them, but they would nevertheless be killed off by famine - which would come to the same thing.
Last year, when I was in the Yugoslav mountains, I heard that the inhabitants of a small mountain village, having no maize or wheat upon which to live, were simply cutting down a forest which belonged to them and were living on what they earned by selling the wood. I went to the village, collected together some of the leading inhabitants and endeavoured to reason with them, just like the great industrial states reason with us. I said to them: "You possess plenty of common sense. You see that your forest is becoming smaller and smaller. What will you do when you have cut down the last tree?" They replied to me: "Your Excellency, that is a point which worries us as well: but, on the other hand, what should we do now if we stopped cutting down our trees?"
Okay, so this is a very dated set of observations, but I think the underlying questions still remain valid: how do you address the differences between various nations' available resources? As Malinkovic points out, not everyone has the good fortune of living in a country like Canada in which vast material resources are distributed amongst a relatively small population. Neither do all countries have the wealth to invest in educational development that would provide them with human capital to offset a shortage in material assets. How are they going to get it? Are you going to give it to them? As long as there is inequality in the assets of trading partners, trade will also be inequitable. Free trade theorists are therefore simply trying to apply a veneer of legitimacy to the rich getting richer at the expense of the poor.
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