Tuesday, November 29, 2005

Dave Pollard has 10 reasons not to trade with China

Essentially it's a check-list of things that are wrong with China that need fixing; and the way China is driving "race to the bottom" for treatment of workers (eg. using prisoners (ie. slave) labour) to make cheap stuff for export.


Scribe said...

From the article: "we need to stop buying anything from China"

This is the difference between "need to", "should do" and "actually do" that continues to prevail in areas such as organic farming and "just" trade (i.e. a fair price to the producers). Unfortunately, it goes against everything the market approach advocates - namely cheaper prices (relative to quality) and profit incentives.

We love cheap stuff. We've been trained to base things on price, rather than origins or consequences. Economies thrive on cheap labour and cheap imports, so politicians love these "hidden" foreign catches.

"Fixing" this situation will require a whole bunch of different attitudes and approaches than simply not buying certain things, I suspect. Don't expect it within our lifetime.

phil jones said...

I don't think of it as "trained".

I think choosing by price is the logical behaviour in the absence of any clear other supplimentary information.

The problem is that the market reduces products to two pieces of information a) price, and b) surface performance.

That's it's strength, of course. If the information wasn't simplified, the market wouldn't scale to so many people.

But there is a loss. We make decisions we really wouldn't make if we understood all the side-effects of our purchase.

If every item in the suppermarket was labeled with "price", "energy consumed" and "misery caused" then I think people's behaviour would be very different.

Now, many people will say : "ah, but energy costs will get folded into price". I think that's partly true, and partly not. Energy is a weird market (like all markets for raw materials) because it isn't actually "made", and price reflects not the amount of stuff there is (the true supply), but the efficiency of harvesting it from the source. The faster we can pump and burn oil, the cheaper it becomes, which is NOT what price should be telling you about the supply and demand.

Scribe said...

Perhaps there's a difference according to different interests. I agree that consumers, lacking information, will base their decision on price. Given information, they have more of a choice over whether the price is "worth it" still, but their decision will still be subjective, obviously.

However, compare this to the motivations (and therefore the choices) of people who are in it for the money - i.e. the links between foreign trade and local consumers - the importers/producers. To reflect well on shares and profits, cheap imports and cheap overseas labour are still good, and knowing the human cost of materials doesn't detract so much from the idea of paying a low price.

In an economy-driven competition, this then scales up to the politicians who are similarly following a productivity-driven line rather than an ethical one. Labour standards and fair prices push prices up over here, which means stupid measurements like GDP go down once more money flows overseas, and when people can't afford to buy so much.

Perhaps if enough end-of-line consumers cared enough about ethical buying, then companies importing "dirty" goods would think again. But a) this behaviour really isn't inherent to the system - quite the reverse, b) it would take a lot of people to take it seriously, which needs a huge cultural shift which - paradoxically - probably (realistically?) needs support from the government, and c) I suspect the situation is a lot muddier than we would like, with companies adopting a "mixed ethics" product line as a PR trick - making a selection of ethical goods available, but continuing to sell a large quantity of dirty ones, may meet targets (which is how the uk govt will do it, at least) but may not actually change anything.

But yes, I agree with all your stuff about simplicity in markets, and ethical information vs ability to decide. Hmmmm.