Holes in my bucket! Feudalism and Child Labor?

Permabear wrote: »

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Not hyperbole, I'm afraid. Your typical Westlands, Nairobi abode combines mock-tudor elegance with a ten foot wall, topped by electric fences and/or barbed wire, probably an alsatian and two or three askaris behind the wall. Surprised they didn't go for a moat while they were at it. You stay classy, Westlands. I probably would have spent longer living there if it hadn't been for that - it felt like living in a war zone.

My digressive anecdotes had a point - don't discount the power of phenomenological explanations, there's more to Nietzche than the übermensch, you know. Firstly, as above, there are material benefits to everyone living in a more equal society, on any number of levels - a grossly unequal society just isn't a pleasant place, even if you're one of the lucky few, sorry the creative and hardworking few.

Secondly, and related, you can't assume that people's material position in society is somehow a function of their personal merit, at least not in any society I've ever encountered. Slumdog Don Draper could have been Senior Vice President for Sales and Marketing if he'd had the breaks, the guy was good.

This brings us back to one key issue, inequality, and whether a libertarian society would have any internally consistent mechanism to address this?

Permabear wrote: »

the statistics are indisputable on that front, as much as you seem to want to carp and qualify and hedge.

The statistics are very much disputable, they were produced by the Government of Kenya, the IMF did the analysis, as I see it. This is the same Government of Kenya who claim that only 175,000 live in Kibera slums, when the lowest independent estimate is twice that, and most NGOs put the population at around a million.

Permabear wrote: »

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The whole point of wage labour is that it should be sufficiently remunerative to acquire property and from there self determination, right? You're going to be a long time saving to set up your own business on €4.50 an hour.

This was about standard for those kinds of jobs at the time, even with the nascent boom, and it illustrates why we need a minimum wage. There can't be exceptions for "part time" jobs, even in a time of full employment, although it'll be a while before we see that again, because any such loophole is prone to exploitation.

Ok, so getting back to the OP, I find it very interesting that the Child Labor Deterrence Act and Bangladeshi sweatshop workers seem to be something of a cause célèbre for the pro globalization lobby - this Cato review is very relevant, in terms of the present discussion, and highlights the plight of the laid-off workers. But the story doesn't end there.

Firstly, the act was repeatedly introduced at Congress, but in fact never passed, although Sen. Harkin seems to have been constantly active on the issue.

The tabling in 1992 did lead to a major change in the Dhaka garment trade, though. While child labour was illegal under Bangladeshi law, and the terms are more strict than the ILO Conventions, it was a widespread practice. Explosive growth in the industry, almost exclusively export-based, had led to explosive growth in the number of child workers, probably around 50,000, although the Bangladeshi government's estimate was as high as 100,000.

Around the same time, NBC showed a documentary on Wal-Mart's supply chain, highlighting the use of child labour by manufacturers, represented by the politically powerful Bangladesh Garment Manufacturers and Exporters Association, and public pressure led Wal-Mart to undertake that they would force the BGMEA to eradicate the practice.

At this point, however, the garment manufacturers were already contemplating to clean up low-age workers from their factories’ and according to Rosaline Costa, a Bangladeshi human rights activist—as many as 5,000 children had already been dismissed in December 1992. This ‘cleaning up’, however, did not involve the provision of educational alternatives or any substitute income for the children, and this became an important concern as the debate continued

Following this, Wal Mart, the US Government, UNICEF, the ILO, an Asian-American Trade Union, and a couple of local NGOs entered in to negotiations with BGMEA, which continued as the bill was tabled again in 1994, at which point the BGMEA conceded, with the threat of sanctions under the Act looming, and gave an undertaking to stop using child labour by that October, and to provide schooling for them, but no substantive action was forthcoming.

Further negotiations followed, again overshadowed by the threat of the Harkin Bill introducing an embargo on products manufactured using child labour. At the end of 1994, the Republicans took the house, and obviously eradicating child labour isn't an idea that much suits them, so the BGMEA walked out of negotiations, only to be dragged back when the Child Labor Coalition, another US NGO organised a boycott:

‘trade sanctions are a very blunt instrument, but we were dealing with some very blunt people, and we got their attention.’

Ultimately, they came crawling back in 1995 and a Memorandum of Understanding was finally signed:

Under the terms of the agreement, four key provisions were formulated:
• the removal of all under-age workers — those below 14 — within a period of four months;
• no further hiring of under-age children;
• the placement of those children removed from the garment factories in appropriate educational programmes with a monthly stipend;
• the offer of the children’s jobs to qualified adult family members.

The Memorandum of Understanding explicitly directed factory owners, in the best interests of these children, not to dismiss any child workers until a factory survey was completed and alternative arrangements could be made for the freed children.

I'm summarising from this paper, published in International Affairs: Michael E. Nielsen - The politics of corporate responsibility and child labour in the Bangladeshi garment industry

Now, it's open to debate whether the pressure placed on the BGMEA was protectionism in another guise, as to the ethics of interfering in another country's labour relations, and whether it was in fact the Senator, the NBC, Wal Mart or the boycott that forced the agreement. But I think the evidence is clear that child labour is inefficient, and represents just another poverty trap, whether you look at it morally or economically. Certainly, in a globalised world, it seems clear that accountability along the supply chain is a powerful tool - if, as claimed, conditions are better with manufacturers supplying image-conscious corporations like Nike and Apple, it's not much of a stretch to suggest that this kind of pressure has something to do with it.

The argument that labour laws shouldn't be an issue until a country is sufficiently "rich" carries no weight with me, it reminds me of Lenin and Trotsky's view that the Soviet people needed to drive for industrialisation before true socialism could be achieved, one of the single greatest corruptions of the Soviet project.

Labour relations in Bangladesh are still fraught, with mass strikes and repression following the manufacturers' refusal to pay their workers the newly introduced minimum wage - the princely sum of $43 per month - and the torture and murder, last week, of a leading trade unionist. Doesn't look like it's the case that employers happily raise wages according to growth - GDP growth has been at around 5% or more since 2000, inflation over 8% in 3 years out of 4 from 2007-2010.

Obviously, this is inexact, but going by the figures in those articles, $43 per month for 3.2m workers is $1.65bn going directly in to the local economy for an industry worth $16bn per year? They were getting half that, if even - wages below the poverty line - and still the manufacturers held out. Kinda puts some perspective on the "sweatshops lifting people out of poverty" argument, doesn't it? In fact, that looks an awful lot like exploitation to me. I thought people were entitled to enjoy the "fruits of their labours" in the libertarian worldview?

According to our friends at the World Bank (old figures, though):

While fewer people lived in extreme poverty, inequality within and across regions gradually increased

No sh!t. Extreme poverty, as opposed to only abject poverty, these days ... only 58% of children are "severely deprived" according to UNICEF.

On the plus side, it seems that, in fact, 5,000 is the true total of children turned out of work, without alternative, rather than 50,000, as claimed, which would have been close to the entire child work force. I think that Nielsen's final paragraph is particularly telling:

Finally, while it is certainly important to be attentive to the negative consequences of eliminating child labour (and other problems), the above analysis also pointed to some negative consequences of being so: it may serve to redefine the problem, to narrow the agenda and/or to transfer moral culpability from corporations to critics.

As is that to the Cato piece:

In Defense of Globalization will encourage the faithful who believe in economic freedom as a value worth pursuing in and of itself, but also those more pragmatic souls who see it as a necessary if less-than-lovable means to achieve poverty reduction and other worthy social goals. Of all the books defending globalization, Jagdish Bhagwati's may offer the best chance to reach those readers not fatally blinded by anti-market ideology.