Great quote by Mises on poverty—from his Human Action
It is deplorable that such [impoverished] conditions existed [outside the factories]. But if one wants to blame those responsible, one must not blame the factory owners who—driven by selfishness, of course, and not by “altruism” —did all they could to eradicate the evils. What had caused these evils was the economic order of the pre-capitalistic era.
Poverty was caused by having bad rules of the game that didn’t allow for the industrialization and the rise of the standard of living. The workers left the field and went to factories because it was a better alternative for them. We don’t live in economic freedom. Workers suffer from severe injustices. Sweatshop owners are part of the solution.
Powell points out that certain governments trample on property rights, like Indonesia when they take grandfathered property that’s been in families for generations and use the land to sell to foreign oil producers. So it’s the bad rules left on the books by governments. Powell then asks “What are the alternatives to sweatshops?”
2003, debate intel trade economists.
Multi National Corporations pay workers more than domestic firms in 3rd World Countries—Brown, Deardorff and Stern, NBER (National Bureau of Economic Research) 2003.
SASL (Scholars Against Sweatshop Labor) points out that “While it is true that MNC pay their workers more on average than the prevailing market wage, it does not speak to the situation in which most garments are produced throughout the world—which is by firms subcontracted by MNC, not the MNC’s themselves.
Here is an example of the conditions at Kathie Lee Gifford’s sweatshop:
- Honduran sweatshop employed 15 year-old, Wendy Diaz
- She worked for 31 cents an hour—or $967/year
- That translates into $2.75 per day.
Powell says that she exploded into tears, apologized, and promised to reform her factories.
But everyone was making the wrong comparison. They were comparing that with what you can earn in the United States. Real question is: what were the available alternatives to Wendy in her home country?
- More than 15% lived on less than $1/day.
- Nearly 30% lived on less than $2/day.
- As a 15-year old female, she was earning 37% above the national average.
“This was a job, explains Powell, certainly much better with what most of the population was doing.”
But the Kathie Lee scandal was a pure Leftist hit-job
Overnight, the effervescent co-host of “Live With Regis and Kathie Lee,” was branded a pariah after Charles Kernaghan, executive director of the National Labor Committee Education Fund in Support of Worker and Human Rights in Central America, told Congress on April 29 that her clothing line was being made by 13-and 14-year-olds working 20-hour days in factories in Honduras.
But as the National Labor Committee . . . went out of its way to destroy Kathie Lee for some purported impropriety or moral impurity all it ended up doing was force WalMart to end their contract with the Honduras factory. So now none of the kids in that Honduras factory are making while some American do-gooder organization with a national-sounding name earns some salacious notoriety.
And what are moralists to make of the fact that workers from the Honduran factory have criticized Mrs. Gifford because Wal-Mart canceled its contract and put them out of work?