Damn you Walmart!!!

No, that would be a decidedly unfair restatement. I did not offer any specific non-monetary advantages of employment outside of sweatshops because I just don't know what those advantages might be. In general, such advantages would be specific to each individual, so they would be complex, numerous, and varied. For instance, the guy who was known as the champion garbage picker might value his reputation more than the extra money he could receive if he abandoned his garbage dump home and went to work for Nike. The Bangladeshi loan slave might prefer to remain in a system that actually permits his family to get loans (albeit on exorbitant and ultimately feudal terms) rather than venture into a free market system that, while it pays more in wages, does not offer him credit on any terms. And a disposable concubine might prefer relative predictability and security to the uncertainty and risks of the marketplace (not an uncommon feeling among people living in former Communist countries).

echi, attempting to sum up Krugman's article, wrote:

'Free the slaves? Why, that would be downright irresponsible. They're too ignorant to take care of themselves. Without their Massa they would never survive.'

Please show me where Krugman argues that. I must have missed the passage.

Did you notice that I pointed to an article by Paul Krugman, who is a well-known liberal economist? When he writes In Praise of Cheap Labor his partisan preferences contradict his economic competence. To his credit, his economic competence won.

Concerning your comment on "human nature", I don't see how it applies here. As it happens, I'm a pessimist on human nature as well. All I'm saying is that some bad-natured humans are in a better position than others to make good decisions for third world workers. And that those aren't the members of the US congress, whom they have no vote on, and who doesn't have any direct stake in those people's welfare. Who, in your opinion, is better-suited than third-world workers to make decisions for third-world workers?

Fair enough. Now, when you observe these people leave their old jobs to sew sneakers for Nike or weave t-shirts for WalMart, does this support or contradict the hypothesis that those sweatshops gave them better opportunities than they had before? Does it support or contradict the hypothesis that those new opportunities are good rather than bad for them?

Seriously, I think it's rather odd to maintain that individuals are always best suited to make decisions on their own behalf.

As a lawyer, I am familiar with the "reasonable person" standard of responsibility in American courts. That standard is designed to determine what a hypothetically reasonable person would do in a particular situation, not what any actual person would do.

In many real life situations that resemble a prisoner's dilemma, it is the state that intervenes to redress the imbalance in information and makes the conditions of bargaining more equitable.

For instance, suppose an employer needs to hire a worker. He'd prefer to hire the job applicant to work for the most hours at the lowest wages, whereas the applicant would prefer to work for the fewest hours at the highest wage. The employer tells the applicant that, if he refuses to work 14 hours a day at $1 an hour, the employer will hire someone else who will. The applicant, unable to discern what some other applicant would decide if given the same offer, accepts, even though he would undoubtedly get a better deal if he cooperated with other job applicants in demanding fewer hours and higher wages. In a situation like this, the state ultimately steps in to redress the imbalance in information, either by mandating minimum wage and hour laws, or by protecting unions, or both.

Now, does that mean that the state would make a better decision on those workers' behalf than those workers could themselves. I think the answer is "yes."

I am certain that there are people laughing their heads off about these fools who forego profit to help others.

Nobody maintains that, certainly not with the "always" in it. The claim is that a rule, individuals make better decisions for themselves than for other people.

On the other hand, people who act reasonably are dramatically less likely to end up in court than people who don't. Therefore I respectfully submit that your perspective as a lawyer comes with a heavy selection bias against reasonable people.

I agree. The big-number version of this is called an "externalty". (Air pollution would be a good example of a negative externalty, basic research would be one of a positive externalty.) Standard, neoclassical economics has systematically examined externalties, and hasn't found any in international trade.

Alternatively, the job applicant applies for other jobs and sees what other employers offer him.

In the example you give, the applicant would almost certainly get a more attractive offer elsewhere. I don't see what would make the real job market a good example of a prisoner's dilemma.

joefromchicago wrote:

Now, does that mean that the state would make a better decision on those workers' behalf than those workers could themselves. I think the answer is "yes."

I agree it could, but I think the more important question is how likely it will. And in answering that question, I notice that bringing the state in creates even greater extertnalties (or in your language, prisoners' dilemmas) than it removes. Consider voting, for example: If every American makes careful, informed choices about whom to vote for, every American gets a good government. But what if you make careful, informed choices about buying your next car, and everybody else makes careful, informed choices about whom to vote for? Answer: you get a good car, and every American including yourself still gets a good government. (This is true unless your individual vote would have swung the election -- but in practice it never does.) That's a prisoners' dilemma with 200 million players: All other Americans make the same calculation (perhaps not explicitly); all but the idealistic ones research their car options instead of becoming informed citizens. As a result, they act on cheaply produced, easily digested information such as the O'Reilly Factor. Then they act on this sorry excuse for information, and accordingly end up with a president Bush. They don't end up with the Platonic philosopher king you are assuming government to act like. And that's not cosmic bad luck; it's the way democracy works.

So my answer to you is, yes, markets sometimes fail and people sometimes make bad decisions. But people in government are just as fallible as people in the private sector. And everything that makes markets fail -- monopoly power, externalties, imperfect information, arms races -- usually exists to a much higher degree in government than in the marketplace, broadly defined. There are exceptions where market failure is even worse than government failure, national defense being the most obvious example. But they're exceptions, not the rule. As a rule, free markets are the lesser evil most of the time, even when they work imperfectly.

But we aren't talking about international trade.

I'm not sure I understand the point you're trying to make here. It looks like you're describing a free rider problem, not a prisoner's dilemma.

We are becoming so far removed from the basic theme of this thread that I think we have come to the point at which I say: I disagree, and would be happy to expand upon that disagreement in another thread.