Speechy Speech

The shoes I am wearing were made in Laos. This shirt is from L.A. My jeans were made in at least a dozen places, including Cambodia, India, and Azerbaijan. Now, there is a school of thought that would tell you this is a good thing. That making a pair of Levi’s is like making a F-15; it’s best to spread out the process, and with it, the wealth. That by allowing third world countries to compete on a truly free market for the honor of quality-testing our socks, we can do the most good for the greatest number of people.

And this idea is not merely encouraged by the greedy fact that a global free market means we can still afford to buy shoes even after the shoe company we worked at relocates to Singapore. Many of the free-market advocates believe themselves altruists; they believe that global free trade truly helps the poorest people on the planet, that it gives them jobs and financial security, that the loss of employment in the Western World is a part of a necessary sacrifice for the betterment of all. It is the most morally forceful argument in favor of unregulated globalization. And it is the most frightening, because it is so appealing, and because it is wrong.

Globalization is not a rising tide. It does not raise all ships. It’s more like a tidal wave: some ships end up placed neatly, if cartoonishly, on mountains; most end up capsized. The basic theory put forward by free market advocates is this: decreasing barriers to free trade allows anyone, anywhere to compete for the same jobs; and because the cheapest workers a company can find are the poorest, jobs will naturally go to poor workers, lifting them up from poverty. In theory, this levels the global playing field, creating an international middle class, and decreasing the gap between the extremely rich and the extremely poor.

If this rings strange coming from the lips of some of the richest men in the world, that’s because it is more-or-less untrue. A truly free market does very few of the things that it’s advocates claim. Yes, it does create jobs in poorer nations. Cambodia, for example, was able to reconstruct itself after it’s horrific civil war through the help of generous orders for textiles. Yet 40% of the population still lives below the poverty line, and Cambodia is still number 126 out of 161 countries on the human development index. It’s not do to a lack of investment, though that is a problem we will discuss later; if the free-marketeers are correct, Cambodia should be well on the path to relative prosperity. Why, then, is the nation still racked by crippling poverty?

If you look past the realm of basic economics, some grim realities become evident. Yes, the poorest workers are quite likely to be chosen by companies to employ, as they are willing to accept the lowest wages. The Cambodian average wage is only 400 dollars, compared to around 50,000 dollars in the United States. But if these workers truly started becoming wealthier, they would be entitled to demand higher wages; and the advantages of their employment would start to evaporate. Companies are economically pressured to maintain their base of cheap employment, not to raise up the destitute masses. And maintaining a base of cheap labor is all too easy, because a job is not the only thing required for prosperity. In many countries, including American territories like Saipan and the Marianas, an utter lack of labor laws allow managers to restrict factory workers from living outside factory-owned slums, and to require them to work for up to 18 hours a day. And while some companies attempt to curtail such actions in their factories, the majority have little incentive to monitor profitable factories without significant public pressure, a pressure that does not exist.

Now, advocates of unrestrained globalization would point to examples of the so-called successes of, to China and India and their gradually growing middle classes and Americanesque self-made millionaires. But these countries share a common trait, a trait very few of the global community possess: a large, wealthy, and relatively sane government. The Chinese succeed because their government is rich enough to provide incentives for investment, to help grow their own economies, and to attract companies to their shores. Capital under an unrestrained system flow like water, down the path of least resistance; the mere poverty of the residents of Zimbabwe does not override their governments’ massive tax rate, one necessary in that country and many others in order to keep their governments and in many cases juntas in power.

At this moment, the boons of uncontrolled capitalism seem to be gathered amongst a very small portion of the population. Yes, the developed world benefits; I can conceivably buy enough socks with fifteen dollars that I’d be able to last at least two years, and that’s at three socks a week. But that argument does not rouse the hearts of many; no, the free marketers rationalize their demolition of global trade restrictions as the best method to eliminate poverty, to help the Third World. They say free trade is the best form of charity, the ultimate tool by which the destitute masses may raise themselves up. These are pretty words, and they are lies. Free trade helps the rich nations not have to spend much money, and free trade helps the richest citizens in any countries stay in their accustomed places. Free trade DOES NOT help the poor. For under an unrestrained and unregulated free market, a nation that wishes to become less poor has to pay for it. And this paradox will continue. A market with a small number of incentives built in by governments to force labor laws in local factories, to provide jobs in countries that truly need them, not just that can could afford them, could begin to make globalization a true tool for global prosperity. Until that point, our new, flat world will continue to grow closer together, while our social structure will continue to stretch further apart. Until that point, the Cambodians who knit my pants will still make less than the Indians who dye them, and less than the floor managers who tell them to do both. Until that point, my shoes will still be made cheaper-than-ever in Laos, and no Loatian will be able to tell the difference.