Should China Be Judged and Condemned?

Walt G writes: "How can U.S. companies compete against foreign companies that do not have to abide by the same laws and regulations? Even I could run a profitable company in the U.S. with 25 cents-per-hour prison labor, by dumping dangerous chemicals on the ground, spewing poisonous vapors into the air, and ignoring all rules, regulations, and standards. We could easily have a capitalist Chinese economic model in one of our states if we were to remove all the laws and protections inherent to our way of life."

Consider this depressing description of Developing Economy A:

“Workers are paid poorly, only 15-25 cents per hour, and are expected to work 60 hours per week, often in unsafe and dangerous conditions. Sweat shops can be found in every major city across the country. There are no worker fringe benefits, no paid holidays, etc., and unions are nonexistent. Child labor is common, especially providing long hours of grueling manual labor on farms, and farms are so dependent on child labor that schools are not even in session during the peak growing and harvest months of the year. There are no environmental, safety or labor standards to speak of, and dirty black clouds of smoke are a common sight. City streets and sidewalks are often covered with rotting animal waste. People burn garbage everywhere without restriction, and the foul smells and thick smoke from burning garbage are a daily nuisance.”

Sounds like China today? Actually the description above is of the United States in 1900, when it could accurately be described as a “developing economy” by today’s standards.

Now imagine that in 1900 there had actually been a country in Europe or Asia that was an advanced, developed economy equivalent to the U.S. today, and it had started to engage in trade with the emerging, developing USA. Couldn't all of the claims against China today by the U.S. have also been made against the U.S. in 1900 by an advanced economy then – dangerous and unsafe working conditions, limited environmental regulations, no unions, low wages, child labor, etc. etc.?

Many of the conditions we take for granted today in the U.S. are the luxuries of an advanced economy that only became possible because the U.S. went through a developing stage of economic growth (like China today) to eventually become advanced. It's advanced economies with their wealth, prosperity and resources that can afford high standards for safety, the environment and working conditions, not developing economies with their relative lack of wealth and resources.

Therefore, just like it wouldn't have been “fair” for an advanced economy in 1900 to condemn the U.S. for its deplorable working, safety and environmental conditions, it's not “fair” for us today in the U.S. to judge and condemn the conditions in China. Imposing the safety, labor and environmental standards of a developed economy on an emerging, developing economy is not "fair." And imposing trade barriers based on a developing economy like China, based on the standards of a developed economy like the U.S. that has maybe a 100-year head start on China in terms of economic development, cannot be considered "fair."

Bottom Line: Advanced labor, health, safety, and environmental standards are luxuries that only advanced economies can afford. The U.S. couldn't afford these luxuries in 1900 and China can't afford some of them today. But just like the U.S. eventually created enough wealth to afford a clean environment, end child labor, regulate safety, and improve working conditions, so will China. Just give it time.