One of the reasons I got sorely disillusioned with capitalism is the fact that many capitalists I do know will argue about things like maquiladoras or outsourced factories, saying that they’re great for impoverished people because now they have jobs.
So people n the third world are supposed to be happy putting together your flat screen T.V.s, working menial, repetitive, and sometimes dangerous jobs because it’s better than starving?
Last time I checked, true freedom wasn’t working a laborious job for 30 bucks a week thanks to the generosity of some American capitalist. It was the power and means to seek a full and happy life at any means necessary, and the economic flexibility to find a niche for yourself.
Plus the argument reeks of Western superiority.
Outsourcing factories increases the productivity of labour in the country because it has more capital to work with, increasing the marginal revenue product of labour, and therefore increase the wage rate. Nobody has ever suggested that making TVs in factories constitutes “true freedom” (whatever that’s supposed to mean) except inasmuch as it allows people in those countries to achieve their short and long term goals. Foreign investment is an important stepping stone on the road to prosperity.
If there’s anything that reeks of “Western superiority” it’s people who live comfortable lives condemning the very mechanisms that the world’s poor have of increasing their wellbeing, because those mechanisms don’t adhere to some moronic hippie standard of freedom that only wealthy Westerners can indulge in.
The reason “poor” countries are poor is because they lack the resources, skills, labor force and knowledge (or a combination of those items) that it takes to produce “wealth”. Wealth is the best available goods and services in any particular industry.
Poor countries are poor because they lack two things: #1 they can’t build or produce the top notch goods and services that first world countries can. And #2, they lack the ability to exchange for those goods and services.
What does this mean? It means that if you’re country A and you don’t have any oil, let’s say, but you have computer chip manufacturing, you can exchange and have the best of both worlds. Or if you’re country B and you have oil and computer chips, you’re self-sufficient and can remain a first world country.
3rd world countries need help to either #1 produce these goods and services or #2 find ways to leverage what they can produce to exchange for those goods and services.
Stepping out of an agrarian society (farming) and into an industrial society and eventually into a first world society doesn’t happen overnight. It happens through evolution and education of both a society’s/country’s people and their resources/production methods.
People aren’t going to be born with the ability to code computers or build complex production machines or to be top notch doctors. All of these things take education and effort and input and all of those things take time, money or both (usually both). So that process is slow. It’s hard to leapfrog from one position to the other. It is possible and growth can occur fast, but it can not be instantaneous.
For example, I’m working with a company in the Philippines. the Philippines isn’t the poorest but they aren’t rich, either. They don’t produce their own medical equipment (top notch machines like MRI’s PET/CTs and Gamma Knives) in the Philippines. They don’t know how to, they lack the education and industries to do so. So they have to purchase from other countries like the US or Germany or France. They sometimes buy brand new equipment but usually they buy used, older equipment. Relative to the entire planet, they have decent medical equipment but they don’t have a lot of first world level equipment. However, what they have today is worlds better than what they had a decade or two ago. Today, they are about 5 years behind in cancer medicine, 5 years ago they were a decade behind and 10 years ago they were, more or less, ignorant of cancer technology. They are currently limited by one thing, currency exchange rates. The goods and services that they can produce are still limited in quality and quantity so it’s harder for them to buy better equipment than it is for a place like, say, Chicago, USA.
But they slowly invest the income that they do make from their goods/services and they invest that in resources, infrastructure and in education and they now have Filipinos who are capable of installing, repairing and running the equipment, where as before, they had to bring in foreigners to do all of that work and pay a premium for that labor.
in another decade or so, they’ll perhaps have the ability to manufacture that equipment within their own country and they will no longer need to trade for it. When they achieve this, they will be closer to being on par with the rest of the planet.
This is just one sector of one industry, but this is how all emergent markets grow and come to par with the leaders of the world. They need the education, the application of such knowledge and the resources in order to do so and all of those things come with growth, which takes time.
If you don’t believe me, look at China. What was just a few short decades ago an agrarian land of poor farmers is steadily putting more people into the “middle class” than any other country, and that transformation happens through the industrialization and education of the country. No way around that.
Anonymous asked: I know you're what Americans call "libertarian," so when I see you promote wealth of nations, I am confused... you realize Smith was a Libertarian Socialist, right? He condemns free markets left and right in "Wealth of Nations," and I'm guessing you've never read it?
I guess you can call me a libertarian. I’m a market anarchist or an AnCap or an anarchist or a marketist or a voluntaryist or whatever. To make it easy on you, I don’t believe in the justification of government force.
Why did I post a link “promoting” Wealth of Nations? Because it’s a profound piece of writing, not just for economics, but for government, politics and society as a whole. Even if I completely disagreed with it, I’d still link people to it so that they can read it.
I have copies of Marx and Upton Sinclair in my personal library, not because I’m a communist or a socialist or even because I believe there is some merit to those theories, because I think they are complete bunk. But I’ve read them because it’s important to read them and understand them if I’m going to discredit them and promote my own theories. What point is there in limiting yourself to only reading and studying those works which align with your theories. Confirmation bias much?
Yes, I’ve read Wealth of Nations (Ironically, it wasn’t a voluntary decision at the time) and, no, he does no condemn free markets. If that was your takeaway from The Wealth of Nations, I strongly encourage you to reread it (or actually read it for the first time).
As for Adam Smith being a “socialist”, I’m guessing you derived that idea from reading ‘The Theory of Moral Sentiments’? Or did you come to that conclusion because Smith talked about how earners should pay back to society (which I think many people misunderstand this to mean pay more taxes).
And if you’re as confused and as misguided as this message makes you out to be and as lazy as I suspect you are, you can bypass the 1,000 pages of reading and have P.J. O’Rourke read the book for you:
Part I: http://youtu.be/TWu_1qrwf3E
Part II: http://youtu.be/e7fG6XdDFDU
Thanks for playing,