Home / General / Neoliberalism’s Lies about the Developing World

Neoliberalism’s Lies about the Developing World

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The idea that bad factory jobs were a godsend to the developing world has long been a complete lie told by the global capitalist class to sell the outsourcing of jobs and pollution to society. I’ve been saying this for many years and am hardly the only one. Unfortunately, we don’t talk about these issues much in the last few years. So I was glad to see this James North piece in The Nation reminding us that these lies are indeed lies.

The liberal argument that advocated for low-paid manufacturing jobs in the Global South emerged two decades ago and is most closely associated with New York Times columnists Paul Krugman and Nicholas Kristof. It is best summarized by the headline on a September 2000 Kristof column (co-written with Sheryl WuDunn): “Two Cheers for Sweatshops.”

The Krugman/Kristof argument was simple. Both conceded that working conditions in sweatshops were often bad. But, they contended, there was no alternative; other work was even worse or nonexistent. Kristof, who is now considering a run for Oregon governor, found a laborer in Thailand who was thankful his 15-year-old daughter was working in a clothing factory, earning $2 for a nine-hour shift, six days a week.

The pro-sweatshoppers provoked a heated controversy, and the two responded by accusing their critics of being unrealistic. Krugman struck back directly: “You may say that the wretched of the earth should not be forced to serve as hewers of wood, drawers of water, and sewers of sneakers for the affluent. But what is the alternative?” In a 2006 column from Windhoek, Namibia, Kristof provocatively told American college students “to stop trying to ban sweatshops, and instead campaign to bring them to the most desperately poor countries.” In 2009, he wrote from Phnom Penh, Cambodia: “But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.”

Krugman and Kristof asserted that sweatshop jobs were the necessary first step on a ladder that led upward, toward balanced, broad development. Krugman, the more thoughtful of the two, wrote in 1997 that “the growth of manufacturing…has a ripple effect throughout the economy…rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise.” Kristof wrote three years later that “sweatshops are a clear sign of the industrial revolution that is beginning to reshape Asia.” He noted that South Korea, Taiwan, and then China had started by sewing clothing, but then progressed toward more sophisticated, value-added products: cars, computer chips, and cell phones. He implied that nations like Bangladesh now had one foot on the ladder’s first rung, but would eventually leave the dirty low-paid jobs behind.

In fairness, this part of the Krugman/Kristof argument seemed plausible at the time. But over the past two decades, no other nation has followed South Korea, Taiwan, and China up the ladder. And meanwhile, the string of factory fires and building collapses in Bangladesh and elsewhere has shown that sweatshop work is not merely low-paid; it can be deadly. Only global action, such as the just-signed extension, can protect workers.

Right–the idea that what was going to happen in South Korea was going to happen everywhere never made any sense. Moreover, the reality is that the amount of money going to workers in sweatshops is a smidgen of what your jeans and shirts cost and could easily be raised to ensure labor and human rights for all.

Chua also explained that wages for garment workers amount to only between 1 and 3 percent of the final cost of our T-shirts and trousers. That means consumers in wealthy countries could spend slightly more on clothing and barely notice the difference. The scholars James Boyce and Betsy Hartmann lived in a poor Bangladeshi village in the mid-1970s and published their classic account of the experience, A Quiet Violence. Boyce told me, “Take an item of clothing that retails in the US for $15. Of that, let’s say 2 percent—30 cents—is going to the worker. Double that to 60 cents, and you could improve safety, raise wages, and transform the lives of millions of people.”

Chaumtoli Huq, an associate professor at CUNY Law School, has done extensive research among garment workers. (Her documentary film, Workers’ Voices, focuses on women union organizers, and is an intimate look inside the factories and the crowded living spaces.) Huq praised the extension of the Safety Accord, but made clear that it didn’t go far enough. “In my interviews, women workers regularly raise three demands,” she said. “They’re naturally concerned about workplace safety, but they also want to raise the dismally low wages and end the repression of their right to unionize.”

After 50,000 Bangladeshi workers struck in December 2018, the police cracked down violently, and the owners fired almost 12,000 people. (The New York Times, to its credit, editorialized against the repression.) Huq emphasized that unions are an indispensable element of factory safety. Survivors of the Rana Plaza collapse have cell phone photos that show how the interior factory walls had cracked the day before the disaster. Despite their hesitation, they say management forced them inside the next morning. An independent union could have protected them.

Moreover, let’s be clear–the clothing companies and other industries that outsource production control for cost. They control for quality. So the idea that they can’t control for labor conditions is a ludicrous lie. They choose not to. We can make them. We can also work in solidarity with the workers of Bangladesh. No one is going to legitimately argue that this work is coming back to the U.S. The people of Bangladesh need good jobs too. Our role–as consumers and as believers in human rights–is to act to hold corporations and politicians on our end accountable. I will, as always, point to my idea of a Corporate Accountability Act as a place to start that conversation.

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