Study: U.S. Economic Status: Again, #1 in the World

Post Reply New Topic

France is often cited as one of the good examples market socialist economies interestingly by people who favor it. What you describe in the 3rd world, where those with political power (not necessarily the "rich") oppress the people is not capitalism, its more of an example of Feudalism. However, your previous posts did not indicate you were specifically referring to some of the 3rd given the fact you were talking about laissez-faire capitalism and the evil rich that get tax breaks that resides there (and most U.S. business do not do business in such countries for PR reasons).

Before the United States had modern labor laws, people were not chained up and forced to work (unless of course you were a slave in the literal sense). During this time, the U.S. also had a fairly lassiez-faire approach to the market; interesting how that never occurred, isn't it? If we had no labor laws, I could guarantee you corporations would not do what you describe for various reasons (the big one is of course the market, competition, and the fact that U.S. labor is fairly productive). Even if you want to think of them as dictators, remember that dictators still care about approval ratings.

Whatever you might think of corporations their basic responsibility is not to society as a whole but to to their investors and time and time again it is the bottom line that drives their actions. The Asian sweat shops have been a viable alternative to reasonable labor conditions because of this basic drive and until the proper social pressure, be it by exposure of these production methods by humane investigators or by government regulation, corporations cannot, by their very nature, behave differently. At this point the corporate conglomerate has been rather successful in the downward pressure on the middle class, on the corruption of democratic politics, on the devastation of the environment but this general destruction of human and ecological values can, if not controlled and reversed, only result in a general worldwide wasteland of humanity and the Earth in general.

If corporations are all inherently evil as you describe, then how can you explain the non-evil ones that emerged in the U.S. before the era of organized labor? Corporations exists to make profits for their shareholders, but at the same time they cannot treat their employees "inhumanly" under capitalism because of competition from other companies alone (i.e. their employees will leave and go to the "nicer" form). It is in the corporations self-interest to have productive employees with reasonable morale (especially in today's society). Let's say there are no labor laws and the system is pure laissez-faire. There is a firm that treats its employees as you describe, and I notice this. I decided to open my own firm, and offer the people better working conditions. People come to my firm, and there would be lower turnover rate because people dislike their old firm. The other firms either have to offer similar nice working conditions, a higher wage, or go out of business.

Ecological problems mostly occur because there is no private ownership, the area is "commons". If we were to increase privitization of these resources, you wouldn't have to worry about it. Remember, nothing privately owned has gone extinct, nor will it (because it is in the person's self-interest to have some today and have some of that resource in the future).

So that they may earn their daily bread.

To flatly state that corporations cannot mistreat their employees is so violently in contrast to clear historical fact that it probably negates whatever else you might state in the area. I never said that corporations are evil. No more than Tyrannosaurus Rex is evil. They are merely dynamics that behave in the way they are designed. If you can get a Tyrannosaurus to pull a plow without chewing off your head I suppose that might be useful. Corporations are designed to perform as they perform and the consequences are not always beneficial.

Hmm, part of me feels reluctant to say this, as I do support a keynesian economy and a somewhat socialist state, but I actually feel that always critisizing sweat shops is a bad thing.

During the industrial revolution, people worked in horrible conditions. As every country adopted mass production, life expectancy went down, everything became polluted with coal soot, and people worked in what essentially were sweatshops. This was around the time that Dickens was around, so his books can give you a bit of an idea of what it was like. Production and the economy went way up, but standards of life went down for awhile. Once a certain amount of infrastructure and wealth had been built up though, people essentially said "Screw this! ", and started unionizing, protesting, and rioting. This eventually lead to universal schooling, minimum wage, and other socialist goodies. Some places veered into real communism, but others just adopted a health socialism which migrated into the freer markets of today.

Now, if pretty much every first world country went through a period of suck before getting to today's prosperity, maybe that's simply one of the steps you have to go through. No one is really forcing the Chinese as a people to work in horrid conditions, they're choosing to do so on their own. Maybe because they see a long term gain for their children or their children's children?

I'd be more skeptical about this if it wasn't for all the reports of how well China's doing. Sure, it's still got a long way to go, but real progress is being made. Infrastucture is being built, education level is rising, polical rumblings over enviromental and labour conditions are starting to affect governmental legislation. The poster boy for the evils of sweatshops is turning into a poster boy for progress via globalisation.

Now, I do not think that every sweatshop is a good thing, or even most of them. One of the big things that separates China from some of the other third/second world countries is that it has a genuine commitment to law and order and to the progress of China as a whole, not just a rich minority in charge. If all of the wealth created by an industrial nation goes to building palaces, and not to building roads and powerplants, then of course things won't progress. And if a company were using techniques to prolong the sucky part of an industrial revolution, then of course they should be stopped.

But simply saying that all sweatshops are bad and should be stopped at all costs verges on cruelty to me. How else is a poor country with little infrastructure and a poorly educated populance supposed to advance? No one really wants the jobs that are shipped over - for people with our standard of living and general education, they are boring, labour-intensive, dead-end jobs. The transition period isn't fun, but eventually the majority are able to find new jobs, such as in the service industry, that would be impossible in the poor country.

To the poor country, the jobs can be a path to real success. It gets the economy going, gets stuff like plumbing, roads, and powerplants built, and lets people start saving for the future instead of just subsisting from year to year. It's not pretty, and preferably should be kept as short as possible, but industrial revolution sweatshops can be a real step in the right direction.

*Prepares to stop, drop, and roll as the flames start coming in*

To flatly state that no one is forced to work in a sweatshop is on the level of stating that no one is forced to not commit suicide. Economic pressures are very strong and abysmal working conditions cannot be justified by a mere acceptance of the status quo. As is obvious from the joyful flight of manufacturing to areas of miserable working conditions and low compensation these miseries have consequences in areas of better working conditions, a kind of Gresham's Law of labor.

An individual might be effectively forced to work in a sweatshop due to economic pressure. But as a whole, in China at least, people are choosing to work in factories instead of continuing to live off subsistance farming. China existed before globalization, and so logically could function without it. People would die from famine and disease, but that's the reality of that kind of life. It's not oppression I'm afraid, it's natural.

Sweatshops, bad as they are, offer a way out of that. It's not pretty, as should be hurried though if possible, but industrial revolutions are a way to achieving prosperity. This process can be abused, but it is something that actually improves things, and not just a band-aid solution.

Regarding the flight of manufacturing jobs, as I said before, that's the point. Countries that need the economic stimulus of those jobs more get them, allowing them to build up the capital to start creating infrastructure, which then allows them to take on better jobs and improve their internal economy. The country that lost the jobs already had an established infrastructure and level of general education, which allows them to create new jobs that the poorer countries couldn't support - think Hollywood.

Ideally, this transition would be complemented by the rich country investing in increasing the education level of the general populance, so that the average person can take on jobs that they wouldn't have been able before. A really good example of this is Japan; it educates its citizens like crazy, and so has become a center of innovation.

So long as nothing goes wrong, overall there's a large net benefit for everyone. Follow through, and you can end up with two 1st world countries, and potentially a lot more cultural and technological advancements. Do nothing, and everything stays the same; the poor country remains poor, and the rich country remains stagnant, investing its labour force into running unnecessary manufacturing jobs instead of using it for innovation.

I am inclined to disagree. It may increase average wages and wellbeing, but the poor still suffer. There needs to be a safety net to eliminate the poverty trap, and provisions to ensure that healthcare and good education is available to all.

Also, let's see... if we didn't have universal educational provision up to high school level, many more would be uneducated, and western nations, including the US, as a whole would be nowhere near as prosperous as they are now. Let's take away subsidised education. There, now it's fair, according to you.
France's system has probably gone a bit too far in the command direction, but the poorest workers in France are still better off than the poorest workers in the US, and get the best healthcare in the world, for non-millionaires.

Let's look at the statistics.



http://en.wikipedia.org/wiki/List_of_co ... urder_rate

http://en.wikipedia.org/wiki/List_of_co ... %282005%29

http://en.wikipedia.org/wiki/List_of_co ... eracy_rate

http://en.wikipedia.org/wiki/List_of_co ... in_poverty

Safety needs tend to induce moral hazards, which will encourage people to act poorly then go on welfare (France, Germany). As per previous posts on education, no one so far has been able to prove that more education = more prosperity (and I never said I opposed high school education, just that everyone does not need a PhD. to work at McDonald's). I disagree with you on poor workers being better off in France. The poor in the U.S. have higher wages and are able to buy stuff that is middle class level in France (most poor in the U.S. have color TVs, cars, a computer, etc). The effects of health care, particularly universal health care is debatable to say the least (marginal benefit of it being zero of course). Aside from that, it does not make very much sense to disenfranchise a large number of the population just so you can "help" the "poorest" part of it by offering them things like universal health care (which they most likely do not value at the cost paid). If you ran some utilitarian calculation, I think you would find overall, people are made worse off by such programs (because again, there is no free lunch).

Your links seem to be missing several more important factors for workers, namely unemployment rate (extremely important for so called poor since they tend to be the ones unemployed more often than not), GDP growth, and inflation rate. It makes a rather poor argument if you decided to only list stats that favor your argument. The U.S. also ranks fairly well in some of those you list as well (and the % living in poverty one is rather deceptive considering it is on a per country basis, so the poor in the U.S. would be the super rich elsewhere).



I'm not saying that corporations cannot "mistreat" their employees, I am saying that in the U.S., they historically have not and probably will not if we got rid of labor laws (for reasons mentioned previously). I worked at a place that gave away free popcorn as well as free ice cream/cookies on Wednesdays (and various other occasions where free food is present occurred), there was no law that required them to do so (white collar employees are subject to much less regulation than blue collar ones). Using your logic you would have no answer as to why they would have done so (if you admit because it was to help employee morale or something, then you only further my point).



As Speckles pointed out, people choose to work in sweatshops because it is better than working in a field. In a way, they have 3 choices, work longer hours, in a field for less pay, work in a sweatshop, or die. Which would you pick? Once their productivity rises, they would see higher wages/better conditions, similar to what we have seen in all 1st world nations.

To accuse labor laws that assure workers decent working hours and safety conditions of preventing corporations from giving laborers decent working conditions is so obviously some kind of monstrous oxymoron that no further comment is necessary.

So, you believe then that you have the unions and the government to thank for safety and "decent" working hours? I suppose one can't except everyone to be versed in labor history. Empirically, in the decades before "pro-labor" laws, why is it then that real wages continuously rose (as marginal productivity rose) and workers were not paid a subsistence wage? In 1900, 3% of the U.S. labor was unionized and federal regulation was mostly nonexistent, yet real wages in manufacturing rose 50% from 1860-1890, and 37% from 1890 to 1914. It is known income that as income rises, people are more willingly to substitute leisure instead of work. As people's real wages rose, they becoming more willing to take more leisure, fairly straightforward and empirically true historically. Safety works in a similar fashion, employees generally knew the risk of the job, and knew their employer did not often them safety, because they preferred the higher wage over added safety. I remember the British once decided to impose "safety" on their ships leaving towards America by limiting the # of people that could be put on them. A result of which more and more people were trying to board those ships before the law went into affect (since the ships would cost more and people valued the cheap price over the added safety). Also, if the worker values safety so much, he can use some of his own income to increase his personal safety.

Interestingly, so called labor laws actually harmed labor by driving up the unemployment rate to absurd levels (particularly during the Great Depression). In 2002, some economists did a study on the unionized labor market. They found that unionized labor earned wages 15% higher than their non-union counterparts, but wages in general suffered because the economy was 30 to 40% smaller than it would have been without labor unionism. I'd rather have a system where people are employed with 15% less wage than one where so many people are unemployed just so a few can enjoy 15% higher wages.

The tremendous rise in productivity in recent times was due to the rise of technological sophistication and had nothing to do with the decrease in labor unions and if you are blaming the financial excesses which caused the great depression on the rise of labor laws (which took place well after the depression started under Republican president Hoover) I must assume someone must have slipped you a computer and an internet connection into your padded cell.

Umm, I just want to point out that I'm a supporter of socialism.

I think that universal heathcare is a good thing, though I would also support allowing a second private healthcare system for those who wanted to jump the cue, so long as a small tax was added to the private one to improve the public one. If people choose to jump the cue, then obviously the public system isn't enough to serve their needs, and so should be improved - hence the tax. Plus this will help deal with the trend in public/private mixes for the private system to try to take all the easy cases and push the harder, and so less profitable, ones into the public. This effectively creates a system where the public is indirectly subsidizing the private - adding a tax to counter this is necessary.

I think universal elementary and secondary schooling of decent quality is good, and I support partially subsidized post-secondary. I don't like free post-secondary though; it leads to a Tradegy of the Commons IMO. Everyone who wants a degree should be able to attempt to get one, but they should have to work at it and have to pay for the privilage. I don't think people who party all first term then drop out at christmas should get a free ride.

I think labor laws are INCREDIBLY important, and that is very naive to think otherwise. Companies are about making profits, and will treat their employees like garbage if it leads to more profits. Sure, if there is competition for employees, more jobs then people available to fill them, then employers will add incentives. In the case of highly educated positions, which are predominantly white collar ones, this is almost always the case. But when the amount of employment available is less then the number of people available to work, employees have to take whatever is available, under whatever conditions, or someone else will take it and they will be out of work.

Coporations by their very nature must try to squeeze at much profit out of every dollar spent as they can. If they do not, another corporation who does will outcompete them. This is the beauty of the capitalist system, the reason why people in the rat race are always on the lookout for the next efficieny or innovation. In my opinion this truly is a brilliant system, but it doesn't allow for people to be nice out of the goodness of their hearts. There's no point in being nice to your employees to attract people from other firms if you already have enough.

The only way to create an enviroment where corporations can operate at their best and where employees are treated well is to create a law forcing all corporations to act a certain way. If all corporations must pay their staff a decent wage, then no corporation can get ahead by paying them less, causing the others to go out of business. There have been cases of CEOs lobbying for regulations against their own business sector, so they could afford to be nicer to their employees without being at a competitive disadvantage!

Another big reason for labour laws is actually to protect employees from themselves. I have an uncle who's job is to go around telling the workers on the floor stuff like, "No, you have to take off your wedding ring, or your finger might get ripped off if it caught on the machinery.", "No, you have to put on this gas mask everytime you go in this room, or you'll get lung cancer in five years.", and "No, you do have to shut down the machine before you go tighten that nut, even if it means losing an hour of productivity. If you lost your balance, you'd fall in and get ripped up by the gears, and I'd have to be the one to tell your kids they no longer have a daddy."

People think that they'll be okay, that the danger is small, and that my uncle is being an ass. But his company pays him good money to go around all day and do that. Why? Because it gets a huge fine from the government everytime something like that happens. Left to their own devices, neither employer or employee would fix these little problems, and people would die for an extra hour of productivity. Everyone would feel bad, and then continue on with the same stupid behavior. Regulations save people lives.

(Note: CEOs and boards of directors aren't heartless. When I said they lobby for the creation of regulations, safety ones to prevent people from getting hurt are one of them - that's another part of my uncle's job. And he's not part of a union.)

I attended City College in New York City during the 1940's and the tuition was zero. Everybody worked their asses off and the institution produced crop after crop of fine and very talented graduates. Nobody needed to justify their education by going into deep debt to obtain it. If you qualified to enter you got in and you worked hard.

Just because there has been instances of free tuition working out okay doesn't mean that that model is always a good idea. I have been in college within the last year and I can say that there were a number of party students. They tended to be those who's parents were paying for both their tuition and their accomadation and food costs. The reason several of them dropped out is because the money stopped once their grades came in. Arguably if it were free you'd see more students like this, and more abuse of the system would be present.

Going into deep debt isn't good either, and suggesting that it is the only alternative is a strawman. A moderate amount of debt, enough to make the student value the system, would be good. And scholorships would provide for those who can't afford it, so long as they demonstrate an adequate work ethic (i.e. GPA). Anyone who truly wants a degree should be able to get it; but they should have to pay for it, one way or another, to deter the party-animals and those who aren't cut out for it.