Tuesday, April 15, 2014

Free Market BS

Last night I was involved in a conversation (to use that term in a very generous way) with an individual who self identified as a Tea Party activist. I had to end the conversation rather abruptly when his anger management issues became too large to ignore, but that's not what really bothered me about what he was saying. At one point in the conversation he stated that the government had no business telling people how to run their businesses and that all government regulation of business should end. I asked him if this meant he supported repealing minimum wage laws, workplace safety laws, and child labor laws. He responded with an answer that you hear all to often from libertarians and the Tea Party. Yes, he said he supported doing away with all of those laws and stated that if, for example, you eliminated child labor laws the free market would correct the problem because people would stop buying products from any company they discovered was using child labor. Obviously this guy, and anyone else who would use this argument, is completely disconnected from reality and should probably seek professional psychiatric help. But I don't want to just insult this person, I want to take a close look at his claims.

First lets take a look at a seemingly innocuous part of his claim. People would stop buying products they discovered were made by a company using child labor. I certainly wish that this was true, and I will get to why I don't think it is in a moment. What really concerns me about this statement is the "discovered" part. When I read this it tells me that this person, and people like him, fully acknowledge that child labor will become a part of the economy if we leave things up to the free market. They also realize that it won't be stopped within any particular company until it is discovered. I want to know just how it will be discovered? If child labor laws are repealed the government would have no interest in inspecting factories for child labor. If they found it they couldn't stop it because there would be no legal reason to stop it. It would be difficult for consumers to discover child labor issues because the general public isn't normally given free reign to wander around a working factory or distribution center. So if we assume child labor will exist until it is discovered, and we know without laws to regulate child labor it could prove to be more difficult to discover, how is it that child labor won't be a problem? Oh yeah, the market will fix it!

Let's venture back into reality for a moment. Libertarians and tea partiers might be able to argue that free market principles are good for the economy (it would be a false argument not supported by facts but that is something for a different article) but they really can't make any sort of a reasonable argument that the free market supports any level of social justice. The free market is about profits and meeting demand and it will meet that demand by any means necessary. One of the primary demands brought by consumers to the market is the demand for lower prices. Let's say you walked into a store and found a pair of pants that you really liked. You liked the color, the way the material feels, and the fit but the pants were priced at $75.00. Instead of buying them you decide to continue shopping and wind up going into a store across the street from where you found those pants. In this store you find a nearly identical pair of pants but from a different brand. The color, feel and fit are all the same but these pants are priced at $40.00. I think it is pretty safe to assume that most people would buy the less expensive pair and be happy to save $35.00. I assume this because while Walmart has thousands of locations across the US Neiman Marcus has less than 100 even if you count all of its outlet locations. Neiman Marcus carries clothing of higher quality than much of the clothing at a Walmart store but it is also considerably more expensive. Consumers in the US like low prices and good value and so Walmart sells vastly more articles of clothing than Neiman Marcus. It is quite possible that both stores may carry products produced overseas with child labor but that isn't normally a big concern with most shoppers, they simply want good value for their money. Even if it is a concern how would they know? I have never seen a shirt or pair of underwear with a label attached to it that said "Made by 8 year olds in Bangledesh!". The reason you don't see a label like this is pretty obvious, the manufacturer knows it would hurt sales and they aren't required by law to say if thier product was made by children. Sure, if business was conducted in a completely transparent way child labor around the world would probably be reduced, but the only way to make things that transparent would be through laws requiring it. Libertarians and tea partiers should see this conundrum but they don't or they choose to ignore it as they do so many other things.

One of the other things that they ignore is history. The first federal law designed to combat child labor in the US was passed in 1916. Problem solved, right? Wrong. In 1918 the law was over turned by the US Supreme Court for being in violation of the Commerce Clause. Surprisingly the case was brought to the court by a parent who wanted his young sons to work in the local coal mine. If a parent will defend child labor how is the market going to stop it? The thing is that people in the US knew that children were working in coal mines and textile mills and other factories but they didn't boycott these companies and cause them to change their practices. No, they just enjoyed the lower prices that came from cheap child labor while the owners of the businesses enjoyed higher profit margins than would have been possible with a better paid, all adult, workforce. Everyone benefitted except the children and since they had no real voice in the market and no laws to protect them they kept getting sent into the coal mines and factories by their parents. Child labor remained common in the US until 1938 when the Fair Labor Standards Act was passed, which was then challenged by a lumber company but who lost their case in the Supreme Court. This law severely limited child labor in the US but failed to eliminate it. Even today child labor is surprisingly common in America, not just in illegal sweat shops but also in perfectly legal forms in agriculture. I'm not talking about a kid working on the family farm under the watchful eye of their parents, no, in the US child labor is used to pick almost a quarter of the food produced in the United States. That's right, a trip to your local grocery store could be supporting child labor right here in the US just like a trip to the shoe store could be supporting child labor in Asia. Laws have greatly reduced the use of child labor in the US even if they haven't eliminated it completely, what has the market done to get rid of child labor? Not much of anything.

The market, free or otherwise, is not all powerful, it is not all knowing, it is not God and it is not capable of controlling the less than savory conditions it actually creates itself. It is only good at creating profits and funneling those up to the few people sitting at the top of the economic ladder. It isn't just child labor though, in China a company called Foxconn produces products for American companies like Apple. A few years ago the media widely reported that workers at Foxconn were poorly treated, forced to live, on site, at the factories, and were committing suicide at an alarming rate. Apple requested studies on the conditions at the factories and demanded changes but the suicides and accidents and poor conditions still continue. The only thing that has changed is that the sale of iPhones, made by Foxconn, have gone up. The market is aware of the problem but continues to support it. How many of you have actually changed your buying habits when it comes to clothing after hearing about the collapse of an unsafe building in Bangladesh used as a clothing factory in 2013 that killed over 1000 workers? Many of the items produced in that factory were sold in the United States but people in America still keep buying clothing produced in sweat shops under horrendous conditions because you can't tell how poorly the workers who made the garment were treated by its label. You can only see the price. The market can't solve these problems because the market creates these problems. It takes an outside force to address these issues and the only outside force capable of doing so is the government.

Adam Smith, a Scottish philosopher, wrote a book called "The Wealth of Nations" in 1776 which laid out the principles for capitalist economics and later for free market theory. While he was suspicious of government intervention in some ways he also realized that the market was made up of human beings who had only their own best interests at heart and who would ignore the good of society in favor of personal gain.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

Yes, even Adam Smith knew that some government regulation would be needed to stop the market from acting against the good of society. Why the father of capitalism and the grand father of free market ideology would find people who should be supporting his every word ignoring some of the basic principles he espoused (he also said that government only exists to protect the rich from the poor so it is really hard to understand why so many of the wealthy are so adamantly opposed to government intervention) is confusing. It is confusing until you realize that nothing the tea partiers or libertarians say about the economy makes any sense or stands up to inspection through a factual or historical lens. They do not follow a political ideology they follow a set of economic religious beliefs and like most religious zealots they will not be swayed. This does not mean that we have to support their goal of sending most of us into some sort of indentured servitude. We can reject their ideals, we can reject their political candidates, we can shine a bright light on their insane vision for the future by not shying away from conversations in which their concepts are promoted. It is said that it is not polite to discuss religion or politics in America, with free marketeers you are talking about one in the same. So it may not be polite, but sometimes you have to be a bit rude in order to get things done. This is something that needs to be done.

Tuesday, April 8, 2014

God helps those...

"God helps those who help themselves" is a phrase most of us are familiar with. Many mistakenly believe that it is from the Bible or incorrectly attribute it to Benjamin Franklin, it seems to have actually originated in ancient Greece and through the centuries it has popped up over and over again in a wide variety of places, including the Quran. In America it has been widely accepted by Christians, even lacking a Biblical source, as a theological truth and as a way of incorporating US cultural concepts of independence into Christianity. Other Christians, however, see it as the antithesis to the Bible's message of charity and caring for those in need without giving a thought to the class of the person. So how can Christians be so divided over a simple phrase that originated thousands of years ago in a culture that most Christians would see as debauched and paganistic? Who is it that God helps? Which side gets it right?

I think both sides get it wrong. One side uses the phrase to condemn those who they see as lazy and looking for a hand out, the other side uses the phrase to condemn those who they see as greedy and unwilling to help others. This means they are both forgetting what the phrase actually says. "God helps those who help themselves" is not the same as "God helps those who help themselves and no one else". Of course, from a Biblical perspective, God helps those who help themselves but God also helps those who can't or don't help themselves. Some turn over all of their problems to God first and others turn to God as a last resort, but in both cases God helps. With this phrase, as with everything else, people tend to take what they want to out of it, excluding or dismissing those who take something different from it. Most of the time we can find a way to make any set of words, any situation, any set of facts, fit into our own personal world view. We emphasize what we want to and ignore what we need to and in most cases we fail to see the big picture.

I recently read an article about George HW Bush and how he is receiving a Profiles in Courage award for backtracking on his "no new taxes" pledge when he saw that raising taxes was in the best interest of his country and more important than a campaign pledge. He is being celebrated for doing what was right instead of what was politically beneficial. The article states that his fellow Republicans have looked at this same set of events and decided that what President Bush did wasn't courageous but a political blunder that cost him his reelection and they refuse to make the same mistake. Two different groups looking at the same circumstances and seeing two completely different lessons to be learned. Either way America still faces a huge debt and growing inability to deal with its economic problems.

We have to realize that we are all guilty of seeing only what we want to see. We have to realize that it requires a strong effort to see what the other side sees. We have to realize that we can't be aware of the big picture until we put forth that effort. We have to realize that we can and should learn from those who disagree with us and that doing what is right is more important than being right. If we don't, if we keep following leaders who feel it is more important to rally their base instead of rallying their country we will continue into this downward spiral that all sides seem to agree that we have entered. At least there is one thing we all agree on, maybe we can use that as a starting point to turn things around.