Sweatshops a key feature of the best of all possible worlds

A comment on the previous post:

sweat shops are an easy target and are often misunderstood by outsiders. I went to a talk at Northwestern given by Nicholas Kristof on how in nearly every southeastern asian country sweat shops are the only REAL way out of prostitution (the only other line of work available to young girls there). sure sweat shops suck, but they want the work, they want the business, and its really the best we can give them.

what do you think about that viewpoint? i'm just looking at this from a realist perspective.

Is it really the best we can give them? Yes, Kristof is well-known as one of the most prominent sweatshop Candides of our time, but as usual this argument rests on an appalling reductionism in the social and economic context that produces sweatshops and a profound and debilitating pessimism about what we can do about it.

Usually sweatshop apologists ignore the coercive market forces that push people into such employment and simply say "they want the jobs". Well, if your rural economy had been destroyed by a flood of subsidized agribusiness imports or the destruction of collective forms of social security, you might "want" a degrading and debilitating job too.

But let's assume away the real social forces that produce the impersonal violence necessary to create a labor supply for sweatshops. What's wrong with legislating basic safety measures, decent wages, and a right to organize for those who work in these factories? This falls far short of establishing working conditions that might be truly self-actualizing for everyone involved, but could even Pangloss himself object to such minimal reforms?

The answer of the apologists, which is generally overplayed but has more than a kernel of truth, is that such regulations will destroy the very jobs we want to improve (more here). Even if the capacity of mobile capital to drive down work standards by playing poor countries off against each other were eliminated by establishing strictly enforced global minimum standards, the fundamental problem would remain: lower levels of exploitation means lower profits and fewer jobs. On the other hand, over the long term a high rate of exploitation yields increasing levels of overaccumulation as workers are unable to afford the products they produce, and we get crises like the Great Depression, the stagflation of the '70s, or the current disaster. On the third hand, during those periods when capitalist expansion proceeds without crisis, its distinctive style of growth steadily destroys the ecological basis of continued human life.

In other words, capitalism offers horrific working conditions for the global majority and environmentally disastrous levels of consumption for the remainder, all punctuated by crises that regularly yield social destruction on levels akin to war. Sweatshops are a necessary feature of this system, and might seem a rational solution to certain local problems created by wider capitalist dynamics. But when we view the system in its totality, we can recognize sweatshops and environmental crisis alike as just more of Krugman's "paradoxes" - phenomena that reveal the irrationality and unsustainability of capitalism as a whole.

Capitalism is irrational. Where's the paradox?

Paul Krugman is the only indispensable mainstream opinion writer we have. Unlike most of the others, when you get done reading a Krugman column you don't feel like you've actually lost knowledge. Krugman combines a healthy liberal politics with a deep understanding of economics and an ability to put all this in accessible language, and he makes most other columnists look like amateurs.

But he's still a liberal, and he's still an economist. That means he's incapable of giving any sort of fundamental critique of the economic forces he's made a career of explaining. Take this passage from his column today, on a theme he's been pursuing for months now:

We’re suffering from the paradox of thrift: saving is a virtue, but when everyone tries to sharply increase saving at the same time, the effect is a depressed economy. We’re suffering from the paradox of deleveraging: reducing debt and cleaning up balance sheets is good, but when everyone tries to sell off assets and pay down debt at the same time, the result is a financial crisis.

And soon we may be facing the paradox of wages: workers at any one company can help save their jobs by accepting lower wages, but when employers across the economy cut wages at the same time, the result is higher unemployment.
Here’s how the paradox works. Suppose that workers at the XYZ Corporation accept a pay cut. That lets XYZ management cut prices, making its products more competitive. Sales rise, and more workers can keep their jobs. So you might think that wage cuts raise employment — which they do at the level of the individual employer.

But if everyone takes a pay cut, nobody gains a competitive advantage. So there’s no benefit to the economy from lower wages. Meanwhile, the fall in wages can worsen the economy’s problems on other fronts.

The language of paradox here naturalizes capitalist dynamics, distracting attention from the more fundamental question - what on earth are we doing with a system that converts individual merit into collective disaster?

These so-called paradoxes are just more examples of the perverse incentives built into market economies. Sweatshop clothes are cheaper than those produced under decent working conditions, so the rational individual will choose the socially destructive product. Companies that force the costs of the pollution they produce onto society win a competitive advantage, so the environment is steadily destroyed that the individual consumer might save 50 cents. Cutting corners on quality means higher profits - even at the cost of seriously injuring or killing the consumer - so the fairly free markets of China have churned out scandal after scandal of tainted food and drugs.

As with Krugman's "paradoxes", these phenomena illustrate a fundamental truth of capitalism - brutally rational at the individual level, it is insanely irrational as a whole. Even more terrifying, altho the economic system was created by humans and only exists thru our collective institutions and individual behaviors, its logic exists as something beyond our control, acting upon us as an external force animated by unstable, mysterious laws.

This helps explain the widespread portrayal of the economic crisis as a kind of natural disaster rather than what it is: a creation of human beings. We have to start aggressively making the point that capitalism, like the crises and social devastation it endlessly produces, is a human invention and could be ended once and for all if we so chose.