I’d like to hear your arguments related to this issue, specifically pertaining to the arguments put forth in this video: http://www.youtube.com/watch?v=B4IEBsrW9fg
Watched the video:
Now I looked through it all and only found 2 arguments against deregulation, post if you find another as a reply and I’ll edit:
Initial observations: Standard emational appeal with an small undesrstanding of the opposite side but fails in conecting the dots.
Argument 1: The companies move because of rising external costs
Answer: Is moving illegal? And if you say that the companies are SO BAD for the workers shouldn’t you be happy that this happens? But this is mostly false because they move either from regulation (minimum wage or working conditions) or public pressure (which hasn’t happen in a whille as starting a company to compeat is a hurdle in and of itself and Intullectial property rights (which are against free market as it impeades me without agreeing to it) which makes alternative quite scarce)
But lets see WHY THER WORKERS WORK THERE:
If they work there they must think this is there best option of survival. If I have a job that pays x+3$/hour instead of x/$ hour I’ll take the ladder if all the things remain the same. This was seen in the industraliisation of every country as the population EXPLODED and still people were able to survive and have a job.
Argument 2: Local business takes a “slice” of the industry
Answer: How, I don’t. He should have to clarify this. I guess he is reffering to?.. Doesn’t even makes sense
Just my 2 cents
But lets see WHY THER WORKERS WORK THERE:
Mostly because they are former peasant farmers who have had their land confiscated by the state, and as a result have no other choice but to work for foxconn. These slave-shops are only profitable because the of the actions of an oppressive chinese government. I weep for the people in them, even if other so-called ‘libertarians’ do not.
Well, that actually seems like a very libertarian answer, Consumariat.
Anyway, I don’t think this is that big a deal for advocates of markets. Yeah, in countries where there is next to no capital development and horribly hampered markets (stifling competition over labor, among other things), you’re going to have pretty bad working conditions. Now why should this lead me to believe free-markets are a bad thing? It seems to imply the opposite.
Anymore? I’d like to hear arguments in great detial. Thanks for your comments guys.
There are a myriad of reasons why this occurs, and anyone who tells you that the free market is one of them, doesnt understand the issue, or the situation in China.
Life in the Chinese countryside is a dirty, poor, backwards existence with no hope of receiving an education or anything resembling a decent job and no prospects for the future bringing any change. So, people move to the cities en masse. In Beijing, 75% of the people I meet (at the very minimum), are not “Beijingers”, but come to the city from smaller cities. This is also true in ShangHai, GuangDong and the few pockets of somewhat civilized society which exist in the great sea of grinding poverty and misery that is modern China. People come to these few cities because there is absolutly no hope of escaping poverty anywhere else. When hundrerds millions of unskilled, uneducated laborors descend onto a few urban pockets, what should we expect?
So the real question is, why does a country of 1.3 billion people have less than 5 cities which could be said to be “somewhat free of poverty”? Why does America have 1/4th of the population, and yet multiple times more cities which one could move to, and legitimately expect to make a living in?
A simple summary would be: Chinese development is a centrally planned, inefficient mess, in which the entire country subsidises a few cities. Because everyone sees these few cities as their only hope of relieving their poverty, there is mass migration (and I use the term “mass migration” very deliberately here) to these cities from the countryside. Thanks to foreign investment (and other) regulations, there arent enough jobs. But going back to the country isnt an option. And so this happens.
You may have better luck in getting replies if you provide textual forms of arguments you want addressed. Text is easier to read/go over than audio. I watched that video one time. Many of his arguments are straw-men, begging the question, etc. Assuming that a free market exists in China, these workers work in such conditions because it is the least bad alternative. (And therefore are better off with the sweatshops being there.) I don’t think much more needs to be said than that.
Nah, I’m not gonna do that. There are plenty of arguments being put forth in the comment section. I’m doing my best to debate them, but I’m not the most knowledgeable libertarian.
Wasn’t aware of the scale of this so didn’t bring it up. “Urban development” comes to mind. Another argument in the barrel now!
I don’t weep because I know it’s something which I don’t participate in and have no control over… Yes it’s shitty but that doesn’t mean we should just weep. There are better ways to solve it, like actually stop buying from the companies that do it, look for companies that don’t or educated people why it’s this way.
I’m not gonna translate the video, but I’ll post some of the comments:
“Before there were regulations against it companies often did collude on price fixing. That’s a known fact and was the reason behind the laws against it. A group of the largest companies in a single area (Apple and Microsoft) talk and decide that they are going to make the prices so low for their goods as to effectively price everybody else out and become the only remaining companies then they decide to charge the same higher amounts for their goods to make up for lost reveune.”
“Customers only have the power when it comes to price if there’s competition. In an area where there’s no competition or the prices are fixed then the companies decide on the price. Both of which are entirely possible when there’s no regulations covering such things.”
“yes that’s what i was saying. They won’t give these benefits out by choice so we have to force them to. If they DID give the benefits out by choice it’d hurt their profit and the shareholders would appoint someone else to run the company, sadly. That’s why we need government to regulate. I was only questioning the ‘happy worker = productive worker’ thing as productive workers lead to higher profits and if that was the case we wouldn’t need regulation (which clearly, we do).”
“The federal reserve controls the government. They could flood the market with so much money to effectively bankrupt the US by making the money worthless while they invest heavily in forgien currency to protect themselves. Or it could make interest rates so high that the government couldn’t afford to borrow money and would collapse. there is a government appointed chairman but he has no real power and can only act with permission.”
"forget CERN, who’d fund the highways? Like “who made god” libertarians respond with “oh that’s an old question" but it’s TRUE. No large scale highways are private, there’s good reason for this. They can’t “evolve,” no individual profits from them so a company building them would benefit his competitors more than himself. You don’t need to evoke CERN to get the stupidity of anti-statism out of the way.”
“But, according to testomony, Microsoft was saying that their browser MUST be included with their software even if the comapny didn’t wish to or they had their own browser that they wanted to include. Not all of them wanted it but were being told that they had to do it. Also microsoft was so large that they could underprice anybody else that tried to start a different company in the same field (software) and force them out of business in a couple of years.”
“Ironic how “Communist” China is a free market fundies wet dream…”
"Rothbard has a chapter on roads in “For a New Liberty”. His answer, as always with libertarians, is that private highway owners would have greater incentive to provide smoothly navigable and well maintained roads than does government. It always comes down to profit incentives with libertarians, and these incentives are of course a one way road running wholly in the direction of the public good.
There is no incentive for highway owners to collude…"
"…and charge outrageous rates along exclusive routes, or anyway incentive now is just some soft speculation when the shoe’s on the other foot, and the market would prevent trusts from forming, and even if it didn’t space for roads and the authorizations for competitors to construct them are obviously unlimited, and even if by some unholy miracle highway owners did successfully collude to fix outrageous prices, this would hurt their bottom line because people would just stop driving.
"there’s a reason the Austrians take every opportunity to bash empiricism and statistics…
profit incentives are cool, i just don’t see any time in history when a company has been driven by it’s profit incentive to build highways, and they always leave out externalities. We have an incentive to stop externalities (all of us) and if we’re not doing it by mob violence we need some more peaceful means I wonder what we’d use, some orderly grouping of people what’s it’s name?"
"As I’m sure you are aware, there are no ideal societies. Hong Kong is a excellent example of what happens when you protect property rights and otherwise keep your nose out of things, and it’s population of over 7 million (how many countries are there the size of America? Size wise, not much. Population wise, still not many larger than us, none as well off, and all more socialist than us) is nothing to sneeze at. "
Basically, most arguments follow that same vain.
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Blaming low wages, poverty, and worker abuse of th 1800’s on the free-market.
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Robber barons abusing workers, thus being the cause of anti-trust laws and worker’s rights.
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Differentiating between good regulation and bad regulation.
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Dergulation caused the current economic crisis.
Stuff like that.
Ya, i saw that. Great vid by fringe.
“No large scale highways are private, there’s good reason for this”
Hehe, what a howler. There’s probably a dozen reasons why, but the capitalists not being able to make cross-country transportation profitable ain’t one of them. Has he ever heard of the railroads?
The whole “nobody can build roads but the government!” line is so tired. People forget that the first major paved road in the US was privately built and operated as a toll route:
http://en.wikipedia.org/wiki/Lancaster_Turnpike
- It was the first turnpike of importance, and because the Commonwealth of Pennsylvania could not afford to pay for its construction, it was privately built by the Philadelphia and Lancaster Turnpike Road Company.[5] Credited as the country’s first engineered road, its ground was broken in 1792[6], and stimulated economic recovery. By the 1840s, the use of railroads and canals dealt a serious blow to the companies who specialized in the manufacture of wagons and coaches. During the next fifty years, the road suffered from lack of use and maintenance, but later saw recovery with the invention of the automobile.
- In 1876, the parallel Pennsylvania Railroad bought the turnpike from 52nd Street in Philadelphia west to Paoli for $20,000 to prevent competing streetcar companies from building along it. In 1913, the turnpike became part of the transcontinental Lincoln Highway, and tolls continued to be collected until 1917, when the State Highway Department bought it for $165,000.[7] In 1926 it was designated as part of U.S. Route 30 along with the rest of the original United States Numbered Highways.
It stayed in operational for over 100 years and only fell into state hands during the Progressive era. Private roads used to be fairly common. Even now in Pennsylvania, there are plans to lease the operation, maintainence, and toll collection of the modern PA turnpike to private companies, and there are eagre bidders. Granted, this is marred by the same problems of “privatization” rather than a truely free market solution, but it shows that the idea that roads and highways are unprofitable to be bunk.
“Before there were regulations against it companies often did collude on price fixing. That’s a known fact and was the reason behind the laws against it. A group of the largest companies in a single area (Apple and Microsoft) talk and decide that they are going to make the prices so low for their goods as to effectively price everybody else out and become the only remaining companies then they decide to charge the same higher amounts for their goods to make up for lost revenue."
This is the same old line of predatory pricing and most economists (even non-Austrians) don’t really believe in this anymore because it has been so thoroughly debunked by the mass of the science. Laymen believe it because superficially it sounds viable. The line goes "a large firm sells its products below cost to put smaller firms out of competition. Once they have achieved this, the larger firm now has a monopoly and can charge whatever prices it wants. There are several problems with this idea made evidenced by the utter failure of its implementation by several firms.
First, who is to say the smaller firms wont simply buy up all the already created, low cost products made by the larger firm and then resell them to the public at a slightly higher price (see Herbert Dow and his competition with the German cartel’s for the chemical Bromine)?
Second, lets ignore the first problem. Still, the larger firm takes an enormous risk selling below cost because it would be difficult to tell how long this practice would need to be executed before the larger firm could run ALL of its competition under. Can the larger firm execute this strategy that long before going under? Also, why would the shareholders of the company allow for such a policy losing them so much money? They would likely sell their shares quickly if the firm remained using these practices. This would cause an influx of supply of the shares to the market, thus lowering their value.
Third, despite these facts, lets assume the larger firm succeeds in running its competition out of business. Once they raise their prices to exorbitant levels, why then would some enterprising entrepreneur not start another competitive firm then after. At the very best, the larger firm could only enjoy these monopoly profits for as long as it takes another competitor to enter the market. Will this be enough time to recoup, much less overall profit, from the practice of predatory pricing?
Finally, one argument I’ve never heard an Austrian make is that the ability to raise prices to whatever level a firm desired would be to attain a monopoly in a good or service that people absolutely MUST have, such as water or food. This even ignores that there are many kinds of food all of which have substitutable goods. Fr instance, great! You have a monopoly in bananas! Well, I’ll just eat apples. Oh, you have a monopoly in all fruit? Ok, I’ll eat more vegetables. Do you have a monopoly on these things in just the U.S. or the world over? Who’s to say my foreign competitors won’t come to supply the “helpless” consumer? Anyway, back to my final point: even if you have a worldwide monopoly on, say, diamonds, you could only arguably say what I really have is a monopoly on engagement rings that don’t use any other precious stones, or on diamond cutters. But these are things that people do not need. So, unlike water, should the supply become artificially low enough, or the price raised to monopolized levels, there is still a point at which people simply will not buy; this is not because they cannot afford to, but because the utility of the diamond simply looses out to the money they would have to pay for it. The laws of supply and demand still pertain.
The big issue with monopolies is that they are so poorly defined. I have a monopoly of MY cellphone. There is only one in supply and I have full control over it. When you call something a monopoly, do you mean domestically or internationally? Do you mean you have a monopoly on one good or all of its substitutable goods as well? If antitrust were willing to go far enough, you could say that everyone has a monopoly on something. Coke has a monopoly on Coke. And, oh, how funny! That the largest and only supply of monopoly power is granted by the government; the exact same institution that regulates against any form of natural monopoly. In most cases, there is, in fact, a regional monopoly on water, electricity, and cable television; two goods of which, arguably, we all need, but we never hear anyone complain about these monopolies. We only hear how dangerous it would be if ticket master and live nation merged. That would be true tyranny of the elite!!!
Hope this helps