Over the last few days there’s been an interesting back-and-forth between Erik Loomis and Matt Ygeslias about holding international corporations to some common set of labor standards in all countries they operate. Erik’s most recent post calls Ygeslias’ crude “creative destruction” model of development economics “the Gilded Age Theory of Risk,” which reminded me of this:
After their work, the workers often have to travel for hours in order to reach their homes. The tramway company has been bankrupt for years. As usual a receiver, who has no interest in speeding up the liquidation, manages its affairs; therefore, new tram cars are not purchased. The old cars constantly break down, and about four hundred people a year are thus killed or crippled. According to the law, each death costs the company about $5,000, which is paid to the widow or heirs, and each cripple costs $10,000, paid to the casualty himself. These compensations are due so long as the company does not introduce certain precautionary measures. But they have calculated that the four hundred casualties a year cost less than would the necessary precautions. The company therefore does not introduce them.
That was written about Bangladesh, or Vietnam, or China, or Mexico. That was written in 1904, about the United States, in a letter to his mother by Max Weber. Hans Gerth, & C. Wright Mills quoted that letter as evidence that on his trip to the US, “again and again, Weber was impressed by the extent of waste, especially the waste of human life, under American capitalism. He noted the conditions that the muckrakers were publicizing at the time.” *
I thought of that because, despite Erik’s claim that it’s not expensive to provide a safe work environment, I’m afraid that the rational choice that’s most relevant isn’t an informed choice by the workers in a developing country to do work that need not be dangerous, but corporate (and often government) elites to make the rationally choosing to commodify human beings.
Among the great reforms of the early twentieth century were labor laws that set a floor below which costs could not go at the expense of workers and of citizens. Worker safety laws couldn’t allow an employer to gain competitive advantage at the expense of his workers’ safety. He couldn’t gain competitive advantage by cutting pay below a minimum wage. And because of consumer protection laws, he couldn’t gain competitive advantage by selling shoddy or even dangerous products.
I’m no expert on Bangladesh. But in general, US, European and Japanese corporations don’t operate outside the developed industrialized countries only for cheap labor. Many operate in those places because they are not prohibited–in practice, at least–from spewing pollution, from discriminating against and abusing workers, from denying them pay, from failing to maintain a safe work environment, or from bribing officials for favorable treatment.
Matt Ygeslias may be correct that workers are making a conscious choice to work in a dangerous job. But they’re often doing that because the choices before them–subsistence farming or extreme poverty in urban hellholes–are certain dead ends. But he appears to think it’s necessary for developing countries to pass through all the squalor and degradation as people did in the 19th and 20th centuries in Europe and North America. But it’s not necessary. It’s no more necessary that people die at work because it’s cheaper and easier than creating and maintaining a safe work environment than it’s necessary that those countries go through stages of communism or fascism, as almost every recently industrialized country did in the early 20th century. If we refuse to accept that it’s necessary that developing countries go through a stage of savage totalitarian dictatorship, why should we accept it’s necessary that large numbers of workers will die deaths that can easily, even if not cheaply, be prevented?
*Gerth & Mills–From Max Weber: Essays in Sociology pp. 15-16