U.N. environmental consultant Rene Dubois might be horrified to see the phrase he coined in 1972 applied to the world's largest retailer, the source of all evil for many so-called progressives these days.
And yet ...
Dubois was suggesting that ecological awareness should begin at home, asking us to think about how our individual actions reverberate through the environment and culture even on a global scale. In the area of economics, there is nowhere this insight might better be applied than to the relationship between Wal-Mart shoppers and millions of Chinese peasants looking for a way out of grinding poverty.
Consider some numbers:
•From 1990 to 2002 more than 174 million people escaped poverty in China, about 1.2 million per month, according to the Asian Development Bank.
•Wal-Mart had an estimated $23 billion in Chinese exports in 2005; perhaps 70 percent of Wal-Mart's products are made by various manufacturers in China; in addition, Wal-Mart has 60 retail stores in China and directly employs about 30,000 Chinese.
•Extrapolating from these numbers, Wal-Mart might well be single-handedly responsible for bringing out of poverty about 460,000 Chinese per year, according to Industry Week magazine.
So, even without considering the $263 billion in consumer savings that Wal-Mart provides for low-income Americans, or the millions lifted out of poverty by Wal-Mart in other developing nations, it is unlikely that there is any single organization on the planet that alleviates poverty so effectively for so many people as Wal-Mart does in China. Moreover, insofar as China's rapid manufacturing growth has been associated with a decline in its status as a global arms dealer, Wal-Mart has also done more than its share in contributing to global peace.
How can this be, given the vast and growing literature documenting Wal-Mart's faults? We have seen workers in the factories of Wal-Mart's suppliers complain on tape about being forced to work long hours under terrible conditions. Certainly no one should be forced at any workplace. And yet even articles documenting Wal-Mart's faults often mention other facts that ought to be considered before coming to too quick a judgment concerning the overall impact of the corporation. In a Washington Post story titled "Chinese Workers Pay for Wal-Mart's Low Prices," documenting abuses of workers at Wal-Mart suppliers in China, the authors point out that:
"China is the most populous country, with 1.3 billion people, most still poor enough to willingly move hundreds of miles from home for jobs that would be shunned by anyone with better prospects."
If we care about alleviating global poverty we need to take this fact seriously. Without Wal-Mart, about half a million of these people each year would be stuck in rural poverty that is, for most of them, far worse than sweatshop labor.
D. Gale Johnson, an economist who studied regional inequality within China, described the enormous disparity between urban and rural workers as "the great injustice." Urban workers earn about 2.5 times as much as rural workers. Even after counting the higher cost of living in urban areas, urban workers make about twice as much. Not surprisingly, massive numbers of people are moving to the city to work in factories. In 1990, 71 percent of China's labor force was in agriculture, whereas by 2000 that percentage had dropped to 63 percent: This great migration represents roughly 100 million people leaving rural areas to earn, on average, twice as much as they had on the farm.
Other than economic growth, there is no way to double the salaries of 100 million people (and growing). After the 2004 Asian tsunami, more than one-third of Americans gave an aggregate of more than $400 million in charitable aid, an extraordinary outburst of giving by any standard. And yet there are more than 630 million rural Chinese remaining, many of whom are living on less than a dollar per day. While each would welcome a charitable dollar if we could get it to them, that charitable dollar, representing one good day's worth of income, would not do them nearly as much good as would a job in the city paying twice as much day in, day out. Charity cannot take place on an adequate scale to solve global poverty.
Despite Jeff Sachs' enthusiasm for foreign aid, Bill Easterly, in his book "White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good," makes a compelling case that government-to-government aid damages economies as often as it helps them. Does anyone think the World Bank raises more people out of poverty than does Wal-Mart?
What about social entrepreneurship? Ashoka, the highly regarded social entrepreneurship organization certified as among the "Best in America" charities, highlights among its hundreds of projects a worker's cooperative in Brazil that is growing rapidly:
Each member contracts individually with Coopa-Roca, but the collective meets weekly. Membership in the cooperative grew from eight members in 1982 to 16 in 2000, and has surged to 70 steady members today.
Is it heroic to raise one person up out of poverty each month, but merely a statistic to raise up a million?
There is a thatched-ceiling to poverty alleviation through micro-finance. It may well be the case that the vast majority of Grameen Bank micro-entrepreneurs experience considerably greater pride and happiness in their work than do the factory workers hired by Wal-Mart suppliers. But most of these micro-entrepreneurs, who borrow less than $100 each and then repay the loan, do not experience as large an increase in standard of living as do those rural Chinese who move to urban areas and thereby earn an extra $1 or so per day, $365 or so dollars per year. Poor, rural micro-entrepreneurs selling eggs to other poor rural peasants simply do not have access to the vast pipeline of wealth from the developed world.
Most of the sweatshop workers in Japan in the 1950s and '60s, as well as the most of the sweatshop workers in Taiwan and South Korea in the 1970s and '80s, are now middle-class retirees in developed nations. Likewise most of the "underpaid" Chinese workers of today will retire in a state of comfort and luxury unimaginable to them in their rural youth, as average Chinese wages will gradually rise just as they have risen in every other nation that has experienced long-term economic growth. At present rates of economic growth, China will reach a U.S. standard of living in 2031.
Paul Krugman, one of the most aggressively left-liberal economists writing today, understands how economic growth helps the poor. Writing for Slate in 1997, he said:
"These improvements ... [are]the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better."
The Nobel laureate economist Robert Lucas once said, "Once you start thinking about economic growth, it is hard to think about anything else." Non-economists, especially those associated with the environmental movement, regard this as evidence that economics is a form of brain damage, a cancer on our Earth. But rural Chinese peasants surviving on less than a dollar per day do not regard economic growth, or Wal-Mart factory jobs, as a cancer. When a Mongolian student at a U.S. workshop on globalization heard U.S. college students denounce sweatshops, he shouted: "Please give us your sweatshops!"
An unreflective passion for social justice may be one of the biggest obstacles to creating peace and prosperity in the 21st century. While there are most certainly factory owners in China whom we would rightly regard as criminal in their treatment of their workers, it is important not to confuse these incidents with the phenomenon of globalization. It is a good thing that Wal-Mart is encouraging more humane standards in its suppliers' factories.
And yet it is also important to remember that Wal-Mart's "vast pipeline that gives non-U.S. companies direct access to the American market," as Charles Fishman, author of "The Wal-Mart You Don't Know," described it, is a vast pipeline of prosperity for the hundreds of millions of rural Chinese whose lives are more difficult than we can imagine.
Act locally, think globally: Shop Wal-Mart.
1.How does the attitude of Chinese workers differ from the attitude of American workers toward Wal-Mart?
2.How has Wal-Mart lifted many Chinese out of poverty?
3.Why is Wal-Mart viewed as a cancer by the American Left but not by Chinese?
4.How would one imagine that Wal-Mart may help the Chinese military and result in creating a superpower out of this large developing country? Please give your opinion and why?
2006-11-15
20:53:08
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6 answers
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asked by
Benedict A
2
in
Law & Ethics