Thursday, May 2, 2013

Bangladesh Building Collapse Not a Result of Free Trade

The April Bangladesh building collapse claimed several hundred lives. It was a heartbreakingly avoidable tragedy. As the the NJ Star-Ledger notes:

This tragedy could have been avoided. An inspection team had ordered evacuation on Tuesday when cracks in the building known as Rana Plaza were detected. A local bank branch and other small shops in the building told their workers to evacuate. Factory owners ignored the warnings and kept their employees at their work stations, as if they were farm animals.

Inevitably, attacks on the global trade ensued. One journalist referred to "the dark side of today’s international apparel market." A Star-Ledger correspondent ridiculed the idea of free trade. In its April 26th print addition on this tragedy, the S-L's editors did note that "More people across the globe have escaped poverty in the past few decades than at any time in world history, and free trade across international boundaries is a big reason," but headlined their piece "Dark Side of Global Economy [P. 12]."

I left these comments:

This is a case of criminal negligence, not a black mark against free trade or outsourcing. As the editors note, in rather understated fashion, global trade has lifted and is lifting untold millions out of grinding poverty; and in the process, I would add, mutually benefiting the respective economies of the trading partners.

Trade is a win-win, benefiting both parties to the transaction, whether it occurs between neighbors, or across town, state, or national borders. It is in America's self-interest that other countries be prosperous and growing.

More fundamentally, trade is a basic individual human right. Outsourcing is America and Capitalism at its best. As innovative companies like Wal-Mart lower the cost of goods through outsourcing, they increase their own profits even as they raise the living standards of Americans through lower-priced goods, who then have more money to spend elsewhere, bettering their lives while fueling the birth and growth of other industries and jobs--all happening as people in other countries prosper along with us. Outsourcing and free trade is integral to the very process of cost-cutting that fuels rising general prosperity. Trade is a win for all concerned.

Context is always crucial. Keep in mind, assuming the facts in Bangladesh are correct, that we're dealing with the wrongdoing of the few, and it is immoral to generalize through guilt by association.

The above-mentioned correspondent, referring to the Texas fertilizer plant explosion, also  made unsubstantiated claims about "illegals ... who were afraid to complain about anything, including safety problems" and blamed that tragedy on "our international free trade and open borders program." He followed that up with "The only problem with 'free trade' is that America prospered when we didn't have it, and suffers since we have" and featured a quote from someone named Lionel Trilling. My replies:

If true that these illegals were afraid to speak up, it's because of the black labor market status our unjust immigration laws force them into. 
As to free trade, America is not a tribal society that must close itself off from other tribes in the outside world. Americans have no moral obligation to hire only Americans, sell only to Americans or buy only American. America is not about tribalism, but individualism. Each of us, as sovereign individuals, has a right to make choices based on sound economics and rational self-interest. Economic nationalism is essentially no different from racism *, and is equally collectivistic and un-American. Isolated industrial accidents aside, free trade is an inalienable individual right, regardless of whoever you are trading with.

America didn't exactly prosper under Smoot-Hawley in the 1930s. Free trade is prosperity; people getting better together. No trade = no economy and no prosperity. Restricted trade = restricted economy and less prosperity. 
What do you think the "free" in free trade means? It means freedom from physical force and coercion; i.e., freedom from all forms of authoritarianism and tyranny of men over men. Nor is free trade anarchy. It's freedom of association under a regime of rights-protecting objective law. The only way to stop free trade is with force. Banish force from human relationships, and you get people trading voluntarily. It's either-or; free trade or authoritarianism. They are opposites. Fools like Trilling offer nothing but the false choice of tyranny or anarchy, leaving out a free, live-and-let-live capitalist society.

Finally, I had to point out a few things to the habitually snippy Marylou Stark:

Marylou, keep in mind that these workers voluntarily choose these jobs, because they're better off than without them. Working conditions are lower than we would like only because these countries are poorer. As their economies prosper, their work places will become cleaner, safer, and wages will rise. But prosperity must come first. This is a matter of historical fact. It's a matter of cause and effect. Context is everything. Free trade fosters better working conditions over time, by fostering prosperity.

On one final point, it's unclear whether the workers knew of the warnings about the building, although there are indications that they did. If they did, and went to work anyway, that is a tragic indication of how much the workers valued their jobs, despite the risks and poor (by our standards) working conditions. It is simply untrue that, as Michael Mikulewicz states, "the employees were effectively forced [to] report to work by the management, who explained that no wages would be paid if the orders are late." There is no evidence presented that any of the employees were physically forced into the building. They had a choice, and, if they were aware of the dangers, made the wrong choice voluntarily. This does not, of course, excuse those in charge from criminal culpability, because they ordered the factory open with full knowledge that they were putting their employees in grave danger.

But this tragedy can not be hung on free trade. Free trade is the answer, not the cause.

*I owe credit for this and a few other points to Harry Binswanger, in his Forbes article Outsourcing is America at its Best.

Related Reading:

More Dangerous than the Factory Building Collapse—George Reisman

Capitalism In No Way Created Poverty, It Inherited It by Yaron Brook and Don Watkins

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