May 14, 2005
Fair trade, free trade
Today is World Fair Trade Day. Lots of activities around the world—everything from creating a “Fair Trade Zone” in Vancouver, British Columbia, to a fundraiser in Melbourne, Australia, for coffee farmers wiped out by the tsunami. Even the Bush administration is joining in:
U.S. textile and clothing manufacturers are praising the Bush administration for re-imposing quotas on Chinese-made cotton trousers, cotton knit shirts and underwear, saying the quick action was needed to save thousands of American jobs.
But retailers are complaining that the new limits on Chinese imports and more that are expected to be imposed on other clothing categories will simply mean higher prices for American consumers.
OK, well, maybe not quite “joining in.” Still, at least U.S. businesses are entering into the spirit of things:
Nearly 10,000 workers who make toys for McDonald’s Happy Meals returned to work Friday after staging a two-day strike at a factory in central Vietnam to protest alleged unfair and abusive labor practices, officials said.
…[W]orkers alleged that they were forced to work 12-hour days with no overtime and were allowed only 45 minutes for lunch. They also complained that their wages were cut if they visited the restroom more than twice a day or if a visit to the doctor took longer than two hours.
…The workers received a pay increase from 2,500 dong (16 cents) to 2,750 dong (17.5 cents) an hour, labor leader Thong said. The company also agreed to issue more bathroom passes and to order supervisors to improve the overall factory atmosphere, he said.
In a statement, McDonald’s said the company “takes these issues very seriously. We have a strict code of conduct for suppliers based on our belief that employees deserve to be treated with dignity and respect.”
Well that’s a relief.
Unfortunately, all this tends to give capitalism a bad name it doesn’t deserve. For all its flaws, capitalism (along with free trade) has transformed global wealth, health, education and life expectancy these past 50 years—just as surely as alternatives like communism, socialism or simple refusal to play (aka Dear Leaderism) have failed.
Yet here we are on World Fair Trade Day still wondering whether capitalism is really the answer, and pondering the protectionist stupidity of Bush and the callousness of McDonald’s. Clive Crook, writing in the National Journal (article URL now unavailable) on May 13, nails it:
Partly, of course, it is that hundreds of millions of people still endure lives, often brief lives, of grinding poverty. Even so, you might think that capitalism would still be recognized – more than it is, at least – as the poor’s best hope, rather than as the system that holds them back. Poverty is retreating faster than ever before in many developing countries. You can’t help but notice that the countries that are opening themselves up to trade and foreign investment – in effect, to global capitalism – are advancing the fastest. China is the most conspicuous example. Is capitalism holding China back, keeping its people in poverty? Obviously, just the opposite.
The region whose plight is most desperate is Africa. Here it might seem to make more sense to blame the “global economic system” for keeping the poor in poverty. And in a sense, it is true, because rich-world trade policies do continue to discriminate, scandalously, against exports from Africa. But the plain implication of this is that Africa needs more exposure to trade with the West, not less; more capitalism, not more of some other system, whatever that may be. Increasingly, Africa’s own governments are making this point themselves. They want access to Western markets. Where is the chorus of Western demands, in the name of economic justice, for rich-country markets to be thrown open to imports from the world’s poor countries? You cannot hear it. It is drowned out by denunciations of sweatshop labor and “naive confidence in free trade.”
In other words: even for the poorest of countries, capitalism is the only economic paradigm that works. Assuming politicians and companies try just a little harder to play fair.
Posted by Stephen at 6:40 PM in Economics | Humanity | Permalink | TrackBack (0)
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