Sunday, March 07, 2010

From China's Sweatshops: A Wave of Prosperity from Market Forces and Ambition, Not Activism

China's Rural Boom, Factory Workers Get the Last Laugh


WUHU, China -- "Years after activists accused Nike and other Western brands of running Third World sweatshops, the issue has taken a surprising turn. The path of discovery winds from coastal factory floors far into China's interior, past women knee-deep in streams pounding laundry. It continues down a dusty village lane to a startling sight: arrays of gleaming three-story houses with balconies, balustrades and even Greek columns rising from rice paddies.

It turns out that factory workers -- not the activists labeled "preachy" by one expert, and not the Nike executives so wounded by criticism -- get the last laugh. Villagers who "went out," as Chinese say, for what critics described as dead-end manufacturing jobs are sending money back and returning with savings, building houses and starting businesses.

Workers who stitched shoes for Nike and apparel for Columbia Sportswear, both based near Beaverton, Oregon, are fueling a wave of prosperity in rural China. The boom has a solid feel, with villagers paying cash for houses. "No one would take out a mortgage to build a house," said Wang Jianguo, 37, who returned after a factory injury in a distant province to the area near Wuhu, west of Shanghai. "You wouldn't feel secure living in a house you didn't own."

In the end, market forces and ambition, not activism or corporate initiatives, pushed up wages and improved working conditions. The forces originally unleashed by the late Chinese leader Deng Xiaoping still drive China's economy, producing a manufacturing labor shortage and giving villagers viable choices beyond factory work."


MP: We shouldn't judge China's working and living standards with a 21st century American viewpoint, but we should more realistically view China with a viewpoint of America in the year 1900, when the U.S. went through a similar transformation from a rural, agricultural-based economy to an industrial powerhouse, characterized by sweatshops, poor working conditions, no safety standards, low wages, etc.

This story helps to illustrate the reality that the transition to an advanced industrialized economy includes a "sweatshop" phase on the path to greater prosperity and abundance. And to deny or condemn the "sweatshop phase" is to deny or delay a country's transition to a higher standard of living and greater prosperity on the other end. As the article points out, China's factory workers are getting the last laugh.

HT: Wayne Sanman


18 Comments:

At 3/07/2010 12:05 PM, Anonymous gettingraitional said...

" Villagers who "went out," as Chinese say, for what critics described as dead-end manufacturing jobs are sending money back and returning with savings, building houses and starting businesses.

This is why the Chinese support export manufacturers with subsidies and protections from competition. Manufacturing is a core sector for a diversified economy by bringing value-added benefits. Investment then Production leading to Savings and Consumption should be a continuous growing cycle.

 
At 3/07/2010 12:22 PM, Anonymous Anonymous said...

I am using this article and video in class this week. My students have a hard time understanding that the alternative to the prosperity that the sweatshops bring is desolation and poverty. They have been hoodwinked by the media that says that sweatshops are bad.

 
At 3/07/2010 3:31 PM, Blogger sethstorm said...

The exception and not the rule.

So you support a heavy-handed government that is a bit too friendly with business? How telling.

It is not at all bad to condemn the persistence of said type of business. It is not a question of culture or arrogance. Indeed it is possible to skip the sweatshop if you don't have businesses and governments as close as they are in many Third World countries.

As long as their business doesn't oppose their country, they'll look the other way. Otherwise, they're going to be shot. This just keeps them busy so that they don't act against their government.

Finally, not everyone has the certain "suspension of disbelief" that is required to start/run a business. They just know how to do their job well, and would ask for that to be respected.

They won't get out of that "phase" as long as their government isn't collapsed. Their government won't allow it.

 
At 3/07/2010 4:47 PM, Blogger misterjosh said...

Mark,
Thanks for bringing light to individual people who, while they might not be as free as Americans, are able to make choices in their own self interests.

Then again, if you consider the US takeover of GM & Chrysler, the Patriot Act, drug prohibition, SWAT raids for non-violent offenses, etc, maybe they're not all that much less free than US citizens.

 
At 3/07/2010 4:55 PM, Blogger sethstorm said...


Thanks for bringing light to individual people who, while they might not be as free as Americans, are able to make choices in their own self interests.

...provided that their self-interests don't conflict with their government or their closely-partnered multinationals, which is a LOT easier to do over there than here.


Then again, if you consider the US takeover of GM & Chrysler, the Patriot Act, drug prohibition, SWAT raids for non-violent offenses, etc, maybe they're not all that much less free than US citizens.

Here, you don't get disposed of or shot if you object.

 
At 3/07/2010 4:55 PM, Blogger sethstorm said...

This comment has been removed by the author.

 
At 3/07/2010 5:04 PM, Anonymous Lyle said...

Amen about the correct time frame to view China in. 1900 is also when we had impure foods and the like, which is why the FDA was set up in the early 20th century. Recall triangle shirtwaist company in NY at the time, the conditions were at least as bad as those in China today. (Possibly worse as fire exits were locked and when a fire broke out a lot of people were trapped). Our companies can help move forward with their rules. Just like I think the Chinese government sent a clear message on milk contaimination by shooting a few people for it. (The US restricted capitol punishment to murder and rape at the time).

 
At 3/07/2010 8:23 PM, Blogger juandos said...

Poor sethstorm, still whining...

"So you support a heavy-handed government that is a bit too friendly with business? How telling"...

Hmmm, some people could say that about Obama and some on Wall Street...

"1900 is also when we had impure foods and the like, which is why the FDA was set up in the early 20th century"...

Ahhh, another admirer of big brother's somewhat less than benign oversight...

What part of the Constitution mandates an FDA?

Another $3.2 billion extorted tax dollars going to waste...

 
At 3/07/2010 9:52 PM, Anonymous サクラ Shill said...

邓小平 never looks back.

 
At 3/08/2010 2:29 AM, Blogger OBloodyHell said...

> Indeed it is possible to skip the sweatshop if you don't have businesses and governments as close as they are in many Third World countries.

Says the man who's never owned, operated, or managed any sort of business in his entire life, yet deems himself an expert on economics....

 
At 3/08/2010 7:40 AM, Blogger sethstorm said...


Hmmm, some people could say that about Obama and some on Wall Street...

To be consistent, I agree that it describes both named parties.

I'm not going to give Obama(and relevant administration) a pass for his(their) actions.

 
At 3/08/2010 7:41 AM, Anonymous geoih said...

Quote from sethstorm: "...provided that their self-interests don't conflict with their government or their closely-partnered multinationals, which is a LOT easier to do over there than here."

What is your point? China's government is repressive? All governments are repressive.

Do you have a plan for changing that, or are you just stating the obvious?

 
At 3/10/2010 12:34 AM, Blogger sethstorm said...


What is your point? China's government is repressive? All governments are repressive.

Their government is repressive in such a way that critics don't live long or freely.

 
At 3/10/2010 8:46 PM, Blogger VangelV said...

Their government is repressive in such a way that critics don't live long or freely.

Really? I take it that you have never actually been to China and observed any of the hundreds of very public protests against companies or corrupt bureaucrats that take place daily.

Mark's post is valid and factually correct. You can go in the countryside and see the large houses that have been built by returning migrant workers who have brought money after spending years away from home. Their savings not only paid for homes but were often used to start up small businesses that provide a much greater income to the family than it could obtain by working for others in the area.

On the whole the so-called 'sweatshops' have been very positive for most of their workers, which is not what the ignorant activists have been saying. Instead of looking at the big picture they keep making false economic arguments and bring up examples that are not generally applicable. The Chinese workers are not stupid. They look for the best job that they can get and leave if they are not satisfied with their employers. While corrupt officials will look the other way and allow some businesses to mistreat their workers for a while, bad employers are quickly out of business because they cannot stay competitive.

No matter how much you try to divert the argument, you cannot do away with the facts. Chinese workers are much richer now because employers provided them with jobs that the American and European left wanted eliminated. Yours is an intellectually bankrupt position that cannot be defended with empirical evidence or with sound theory.

 
At 3/10/2010 9:07 PM, Blogger VangelV said...

So you support a heavy-handed government that is a bit too friendly with business? How telling.

How did you get this statement out of what Mark posted? You are obviously letting your ideological reading glasses interfere with your understanding.

It is not at all bad to condemn the persistence of said type of business. It is not a question of culture or arrogance. Indeed it is possible to skip the sweatshop if you don't have businesses and governments as close as they are in many Third World countries.

Why do you want to condemn businesses that let their workers rise out of poverty and join the middle class? Have you have ever been to one of the newly built homes in the Chinese interior and compared them to the old ones? Have you ever talked to any of these workers?

We live in the real world, not in the logic deprived utopian construct that the left mistakes for it. In the real world individual trade labour for money because they prefer it to idleness or activity that offers lower compensation. Just because they are poor, it does not mean that the workers are stupid. They are more than capable of making reasonable choices and do not need someone who has no idea about their choices and circumstances telling them what to do.

As long as their business doesn't oppose their country, they'll look the other way. Otherwise, they're going to be shot. This just keeps them busy so that they don't act against their government.

You have no idea how markets work. Businesses do not work together but compete against one another. To survive they need to be productive and mistreated workers never seem to be productive enough.

Finally, not everyone has the certain "suspension of disbelief" that is required to start/run a business. They just know how to do their job well, and would ask for that to be respected.

Just because you might be afraid to start a business and may not have what it takes does not mean that others should not have the opportunity to do so. The old China hands will tell you of hundreds of locals that they know who started with a little bit of savings and are now extremely rich because they used the savings to acquire the capital that they needed to start productive businesses.

They won't get out of that "phase" as long as their government isn't collapsed. Their government won't allow it.

What exactly does this mean? There is no monolithic China or monolithic government. Local conditions are very different and what works in one place often does not work elsewhere. That said, the Chinese are very prudent and very smart and have a tendency to adopt what works and discard what doesn't, which is the primary reason why their rise from poverty has been as rapid as it was. One of the things that they discarded was the anti-market, anti-worker ideology that you are pushing. They tried it for decades and when it nearly destroyed the country went with what works.

 
At 11/05/2011 3:12 PM, Blogger deborah said...

justify exploitative measures all you want it is a system that will kill us all if continued, limited resources, finite planet...get a clue

 
At 11/05/2011 3:16 PM, Blogger deborah said...

Wow, justify exploitation all you want the moral sideshow is really right out of Empire building dogma. Another issue is resource abuse and toxic ecosystems that are killing us all slowly but steadily as people ignore the truth of wealth making without responsibility.

 
At 11/08/2011 9:01 AM, Blogger VangelV said...

Wow, justify exploitation all you want the moral sideshow is really right out of Empire building dogma. Another issue is resource abuse and toxic ecosystems that are killing us all slowly but steadily as people ignore the truth of wealth making without responsibility.

There is little in the way of 'exploitation'. The 'sweatshops' offer better pay and conditions and are preferable to the alternatives. Which is why so many people prefer to work there instead of working in the fields, begging, or being prostitutes.

 

Post a Comment

Links to this post:

Create a Link

<< Home