The benefits of sweatshops?

One of the favourite points of the neoliberals (especially online and reddit) is that there is evidence that setting up low-wage and generally poor condition manufacturing (which some like to call sweatshops) in developing countries actually helps the countries.

They refer to Krugman about these claims for evidence, claim that free trade agreements standardize labor laws to higher tiers, claim that the policies of China in liberalizing trade and production have lead to lifting '1 billion' out of poverty, and they seem to have evidence (though bourgeois economics) on their side, too:

So the question is: what do we have to counter the idea that "more capitalism" (and by this I mean to lower taxes, increase trade etc.) is good for those in extreme poverty, and good for all in general?

I'm looking also for counter-evidence and philosophy to this point.

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because it's essence of capitalist exploitation. the conditions are cramped and squalid, and the "pay" is sbsolute pennies compared to the goods pumped out by such facilities.

pffff, labor laws in "developed" countries are weakening by the day and they're improving very slowly in underdeveloped countries (and it'll stop to a halt once we have fallen to their level)
it does standardize them, though not to higher tiers


They're ready to admit this, but their idea is that considering the evidence it backs the greater good of lifting them out of poverty. They will appeal to relativism to justify the extremely low wages.

The point is that if neolibs can point to the tendency for life to improve in objective measures, we have much less to stand on when we claim that capitalism is 'exploitative' ("how bad can it be if living standards consistently improve?") and encourages poverty. It would help the left's case to counter these points seriously.

Doesn't a lot of this shit do things like taking people out of relatively secure yet "poverty-ridden" fields such as subsistence farming where they produced enough to live and sticking them in these shops on a wage entirely too low to live on but above the official poverty line, as well? I swear there was a study that pointed that out, but I can't find it.

Sweatshops serve a purpose to the bourgeoisie of both the countries they inhabit and the countries they send their goods to. In first world countries they undercut wages while being too far away to for the workers to strike over (or even be aware of). In the third world sweatshops provide tax income for the local elites, opportunities to reinforce gender or ethnic segregation, and most importantly sweatshops are pseudo prisons where workers can be abused, terrorized, and indoctrinated. It's much harder to do that if they live on farms in the countryside.
Economists are apologists for this insane state of affairs (transporting simple goods like clothing halfway around the planet on container ships) because it's their job, no amount data will change that.

If I recall correctly, something published by Oxfam found that when American companies were forced to stop using child labour from Bangladesh (or some such place), the factory shut down and many of the children simply died rather than going to school. So that's the justification for keeping them running. The justification for starting them is that before they were on 0 wage (farming) and now they're on [something more than 0] wage working in the factory.

Yeah, that's what I was getting at more or less. I should really start saving links to these things instead of hoping I can find them again.

So we're they better off farming?

No, that's why people all over the world have been getting poorer since the advent of sweatshops and factories. All evidence to the contrary is neoliberal propaganda and totally invalid.

Sweatshops at least grow capital stock, of course they are a result of globalization but ironically they actually halt progress in the First World and incite growth in the Third World. They are largely unproductive yet profitable, and instead of automating the labor at home the capitalist rather invests in sweatshops to keep his profit rate up.

What's actually worse than sweatshops for Third World countries is superexploitation (sweatshops are just regular exploitation), this is when they have Third World countries digging out their natural resources, buy them, and then sell the country the manufactured product back at a higher price, this way its empirically impossible to make a net surplus, for example they sell the First World wood and then buy the same fucking wood back in the form of boards at a higher price. And guess what happens then? They are being told that "they live above their own standards" and they need "start being economically responsible", and then they get offered those sweet IMF loans…

That must explain why Saudi Arabia is such a poor country, they sell oil and then buy back gasoline at a higher price.

Are you fucking serious? They import less gasoline than they export oil. That's why they are rich.

Which is precisely the flaw in your reasoning.

that's why first worldists are obsessed with sweatshop, they risk to make their free suff disappear in the long run

it's slightly less shitty than subsistence farming which is the alternative for many people

No, because I obviously assumed somewhat an equilibrium regarding imports/exports, also, Saudi-Arabia is in charge of its own oil, while extraction of raw materials in the Third World is usually done by multinational corporations or their local proxies which allow them to take their surplus to another continent, meanwhile the oil in Saudi-Arabia is a natural monopoly of the state, therefore, they generate a higher value output than other industries, because the state can charge rents for this.

Nice try globalist

Not sure. I've read that serfs in the middle ages actually didn't toil day and night on their land, they had more free time than the average prole in unregulated capitalism.

Maybe it helps Porky, which is what they mean when they say it "helps countries"

Which doesn't exist in the real world.
It's not like there's no Nigerian getting rich of Nigerian oil, it's due to their own failings that they can't manage it like Norway does.
There is no meanwhile here, the same is true for countries like Nigeria (whose princes similarily profit from oil revenues as Saudi-Arabians do) and Venezuela.

We have the Soviet Union and to an extent China. The issue at hand is one of development; what paths are there to develop a poor country, that does not posses a lot of fixed capital and cannot produce enough value added goods to acquire them through trade. The Soviet Union with the Five Year Plans shows one successful way of quickly getting out of that position.

Compared to that, capitalist development is a lot slower. China has shown that they can also achieve a high rate of industrial development via dirigiste capitalism, but it remains to be seen how that will play out.

Most countries import and export arround the same quantity of goods, there are exceptions but usually when you export too much you create a weak home market, which can be seen by looking at Germany, of course profits remain high.

Norway has a more diversified economy, but that's beside the point, because Nigeria is the fastest growing economy in Africa and the second biggest economy in Africa, so your argument is hot air.

The problem with this view is that it makes the sweatshop seem like a "voluntary" choice to "improve" on the old ways of life, which is a massive misrepresentation. The general timeline goes like this:

I'm basing this on the 17th and 18th century British experience but you see this all over the world on a global scale today. For example, in Latin America, flood the market with subsidized American agribusiness products, have the dispossessed farmers move north to slave away in industrial / plantation sweatshops, often over the US border to work on the same farms that pushed them out of the market to begin with. Or in Africa, even today you see US and Chinese imperialism out in force to help African states crush community land holdings.

Life will inherently improve due to the simple fact that people are doing productive labor towards that.

It's like saying "Wow, slaves are actually seeing an improvement in quality of life because society is getting more stuff through slavery, guess it's not exploitative!"

pdf related, those numbers have been hugely exaggerated through statistical manipulation

Reminder that all those studies that claim that capitalism has lifted "insert number here" out of (extreme) poverty usually consider over $10.00 or some other arbitrary number "out of (extreme) poverty"

China did participate in the markets, but they don't want to admit China *Gamed* the markets.

Who wants to admit they got outplayed by a country that essentially took their "exploitation" and turned it into exploiting their former exploiters?

From these sweatshops and factories the modern Chinese industry was born, now everything: from their fighter planes to their electronic products, have benefited from the copying and experience they gained in the factories.

And they arn't even done yet.

tldr: they thought they could exploit China, how the tables have turned…

Here is an article with more info on how the UN and the world bank keep lowering the poverty line in order to make it seem that they are making progress and how their poverty line is too low to be accurate anyway. can't believe it hasn't been posted to the thread already.

the Bank shifted the IPL from the original $1.02 (at 1985 PPP) to $1.08 (at 1993 PPP), which, given inflation, was lower in real terms. With this tiny change - a flick of an economist's wrist - the world was magically getting better, and the Bank's PR problem was instantly averted. This new IPL is the one that the Millennium Campaign chose to adopt.

Here are the points I make whenever people bring up the “capitalism cures poverty” argument.

First off, the statistics are misleading. The international poverty line is based on the average national poverty lines of the 15 poorest countries. That means that it is often far below the national poverty lines of richer countries. For example children in India living under the national poverty line but above the IPL still have a 60% chance of being malnourished. In Sri Lanka the IPL puts poverty at less than 10%, while the NPL puts it much higher (closer to 30% iirc). So the IPL is a shit tier measurement, since it’s virtually no guarantee of basic needs being met. Higher estimates in the realm of $5-$10 daily still show some progress in poverty reduction, although China is largely responsible for a disproportionate amount of this. The point being that the poverty reduction narrative is much less positive than is typically stated.

Second, when you look at the explosion of infant survival rates, literacy, improvement in poverty, etc they correlate with industrialization far stronger than capitalism. Capitalism was the dominant system in some parts of Europe as early as the 17th century (Dutch Republic, Hanseatic League, Italian city states) but the prosperity boom doesn’t happen until the mid 19th century. However if the USSR showed the world anything it’s that you can industrialize effectively without capitalism.

However the thing that really sinks this whole thing is that the nature of poverty has changed. It is no longer a product of scarcity, as the wealth and material to end poverty exists on this planet several times over. It’s entirely a product of distribution of wealth, which is something that results from market distribution mechanisms, which unlike industrialization, IS entirely the product of capitalism. In other words, even if you accept the argument that capitalism reduces poverty, you are also forced to accept that all the poverty in the world is created by capitalism as well. It’s the equivalent of imprisoning a bunch of people in your basement, gradually letting them out one by one, and then calling yourself a liberator.

In other words, the statement that poverty is being reduced at all is somewhat dubious, the claim that capitalism is responsible for this is unsupported, and even if both of the previous statements were true, it wouldn’t change the fact that capitalism is just as much the cause of poverty as it is the “cure”.

The bread book actually has some good takes on this exact issue, and imo if what Kropotkin said was true in the 1900s, then it’s especially true today.

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What a nonsensical line of thought. By that logic, if someone was given the choice between being raped and being killed, rape is a good thing, because it is better than being killed. Or vice versa, but you still get the ridiculous conclusion of death or rape being "good".
But furthermore, who cares if they improve living conditions? You could still set up sweatshops under Socialism. In fact, if sweatshops really are so great for the workers, then under worker's leadership we can expect to see the workers create their own sweatshops!
Finally, I'm not going to argue that developing an economy doesn't help poor people. Objectively, it is """"better"""" to be paid something than nothing.
There really isn't a good liberal take on this. All the rabbit holes lead to Socialism.
Yeah, when you have infinite resources and consumers. It's perfect then, actually. But in the real world, Capitalism can NOT sustain itself, and even an incredibly narrow look at the world can tell you that Capitalist and proletariat interests are not one and the same.
Sorry for blog post.

Wage slavery is still slavery