The High Price For Liberal Moralists: Condemning Trade

Anna McMullen is a “campaigner” for the British organization, Labour Behind the Label, and CNN allowed her to write an editorial, “Bangladesh factory collapse: Who really pays for our cheap clothes?” As much as I want to respect anyone who has a palindrome for a first name, I find the column both deficient, and exemplary of the kind of economic sophistry we read all the time. It is bad economics and a self-destructive way to show concern for other countries.

There are some basic questions that need to be asked for us to have any intelligent opinion about the Bangladeshi workplace. The first one is: Is it a profitable business model for anyone to build a factory that is going to collapse and kill workers? Even if we assume that Bangladesh is missing the cadre of lawyers and the legal structure to sue the business and/or the building owner, is it really profitable in Bangladesh to build a structure that will collapse unexpectedly and kill workers? I am open to such a claim, but I can’t imagine it being true unless someone can show me some data. Right now someone who expected profits from their building has just lost them. Orders for products from that factory have now been transferred to other factories. The factories that have not collapsed are being rewarded with increased business.

So there is no reason to assume Bangladesh is forever stuck with dangerous buildings apart from our paternal help. Why wouldn’t they learn and improve on their own without our kindly intervention?

And another question: What are the construction standards and conventions in Bangladesh outside of those new factories? I remember staying in the luxury hotel of a town in East Africa. I saw the open sewage ditch around it. I saw the water damage in the hallway. I heated my water in the shower using an electrical device that I saw spark blue as I stood ankle-deep in bathwater and idly meditated on why my home government would never allow me to use such a device in any state in the Union. I have no idea if Bangladesh is better or worse than my experience in that country, but I do know that it is impossible to judge factory conditions without knowing something about the domestic conditions of all building and homes in Bangladesh. Do the workers leave superior homes and buy in superior stores and then go work in inferior conditions at a factory?

I agree that Bangladesh should improve, but that’s not going to happen without money. Which brings up another question: Would these Bangladeshis be better off if it was illegal to buy their products? The real victims are not people who sell cheap goods. The real victims are the millions of farmers and others all over the planet who are forbidden by law to sell their goods in the United States or other Western Countries. Those people are impoverished and even dying partly because rich governments want to exploit their domestic consumers by subsidizing certain businesses at the expense of foreign producers. The US producers get to set their prices higher because they have no legal foreign competition.

Now that is real injustice and causes real harm in poor countries who are barred from our markets.