----- Original Message -----
From: "Warren Ockrassa" <[EMAIL PROTECTED]>
To: "Killer Bs Discussion" <[EMAIL PROTECTED]>
Sent: Wednesday, September 29, 2004 12:11 PM
Subject: Re: Help! Offshoring/Outsourcing
> On Sep 29, 2004, at 3:13 AM, Erik Reuter wrote:
>
> [actually a forward of an article by Brad DeLong]
>
> > What are the people who used to sit in their huts and make coir mats
> > doing instead? We don't know. But we do know one thing: Whatever they
> > are doing, they would rather be making coir mats.
>
> I believe that is an indefensible assertion. There is no evidence to
> support this conjecture; the people making mats might well instead be
> performing some other labor, at a factory perhaps instead of in their
> one-room hovels, that pays considerably more than the money-grubbing
> racket ever did.
If those jobs were readily available, why didn't they have enough sense to
think that a job paying $2.00 an hour was better than one paying $.25 an
hour (Ritu can give me better figures)?
> My postulate is just as feasible, just as likely as the worst-case
> speculation submitted by DeLong.
Huh? His explaination reflects the real world....at least as described by
my Zambian daughter. Almost exclusively, people in poor countries that
take work like this see it, realistically, as a chance to improve their lot
in live. Neli would love to have "exploitive" American factories in
Zambia. What hurts Africa is the refusal of Europe to open trade with
Africa.
> > Those who took up the
> > option of making coir mats did so because it seemed to them to be the
> > best available option.
>
> That's similarly insupportable. Certainly making mats is not preferable
> to acquiring an education (there *are* public schools in India). This
> is another premise that DeLong wishes us to accept without
> consideration of plausible alternatives.
He merely supposes that the people choose what they think is best for them.
When the best jobs are taken, the next best jobs then become more
attractive.
>even though the entire crux of DeLong's argument is
> (in essence) that the desperately poor choose to remain so. ("If they
> didn't have doormats to make they'd be doing something worse/less
> productive.")
The second statement is accurate and has little to do with the first
statement. The desperately poor will gladly take the next rung up on the
ladder, no matter how low that rung is. Destroying that rung does not get
them to the next rung, rather it lowers the chance for them to get to the
next rung.
> There's subtle -ism at play here too, possibly racism or culturism: If
> our great corporations didn't magnanimously extend their
> ever-so-generous economic patronage, keeping the lowest economic rung
> occupied, why, who knows what mischief Those People might get up to?
That is not an accurate reading. His point is that the people who do this
choose to becasue there alternatives are worse. All one does if one stops
the selling of these doormats is consign these people to a poorer
existance.
> DeLong's argument sounds very suspiciously like some of those advanced
> to support slavery, but that's hardly surprising, as toiling day after
> day making mats for a corporation, with no hope whatsoever for
> advancement or escape, is, in essence, just that.
No, it is not....unless the people were not allowed to quit.
> Used to be that liberals were bashed for wanting to "throw money at a
> problem" to make it go away. I'm unable to distinguish a difference
> here. Spend money buying fourth world goods and the problems in those
> countries will evaporate? Piffle.
So, why has it already happened elsewhere? Tawian and South Korea, for
example, were both dirt poor countries One can measure it happening. One
can calculate the loss to poor countires when rich countries insist on
paying higher prices locally instead of buying goods
> The problem with the "do something worse than..." argument is that it's
> totally hollow. If an exploitive, wealthy culture moves in and abuses
> the local economy for its massive gain (and minimal recompense is
> offered to the laborers), that culture has effectively become a
> monopoly -- on *work source*.
>
> If that massive, or even large-scale, work source were not available,
> other modes of employment, which might or might not be "better", would
> become available to the locals. (What did they do before old white cows
> in the states got a collective moistie for doormats? India's culture is
> about 20 times as old as America's -- 5000:250 years -- they had to be
> occupied during at least SOME of that time.)
Right, in subsitance farming...with just a little left over to fund an
aristocracy and a few tradesmen. Life in the ancient world was
unbelievably difficult by today's standards. Going back to that ecconomy
would require that the overwhelming majority of the world die from
starvation.
> This is significant in part because, even if wages were worse, the odds
> of the business being owned and operated entirely by the locals would
> be much better. Whatever capital was made would then be diverted
> entirely back into the community -- not a pittance skimmed from vast
> offshore coffers.
But, all the money that is coming in is from the outside. India's ecconomy
is doing much better now than in the '60s, when corporate investment faced
many more hurdles. Gautam or Ritu are both free to correct me, but I'm
pretty sure that the ecconomic situation in India has improved greately
since their international trade increased.
> What's being carefully ignored by DeLong, though, is the inverse
> pyramid. That a vast amount of capital is acquired by relatively few.
> This is a significant problem. Every economy that has *ever* existed
> with wealth concentrated among only a very few has been fundamentally
> unequal, fundamentally undemocratic, and in the main feudal. DeLong is
> arguing in favor of a feudalistic social structure that is covered with
> a very thin veneer of democracy (at best; at worst he's arguing for an
> economic colony-state), and it's reprehensible.
No, he is arguing for the only realistic way to improve the lot of the poor
in the world. Indeed, I'd argue that its not our responsibility to boycott
products from India because wages in India are too low. Its the
responsibility of the government of India, which is fairly representative,
to do this. If it doesn't, its the responsiblity of the people to throw
the rascels out, and get a new bunch of rascles that will get at least this
right.
> And as long as fools propagate this policy of usury, problems will
> continue to get worse, not better.
OK, let me understand this. I know my daughter, who's interned for the
IMF, and is finishing her degree in economics feels like Brad does. She
would _love_ to have the kind of international trade that you call
exploitive, because it would help her people. Why is she a fool for this?
Why is living on substance farming, a bad drought away from a famine,
better than life in India.
Zambia has a per capita GDP of $800. It has 50% unemployment. Its exports
to the US are about 24 million. (< $2.50 per person). 86% of the people
are below the poverty line. Its Gini index is about .51
India, on the other hand, has a per capita GDP of $2,900, with 9.5%
unemployment. Its exports to the US are about $14 billion (~$14 per
person) Its Gini index is about .38.
Zambia has minimal investment in foreign trade that produces jobs. Its
main sources of foreign exchange are the selling of electricity to South
Africa and its copper mines. Jobs like the ones you describe as slavery
would be a step up for most people.
Why is Neli a fool for wanting the lot of her people to improve?
Dan M.
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