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Weekly link roundup 11

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Here’s our weekly installment of links from around the web (see here for all link roundups). As usual, linking does not imply endorsement.

Taking our humanitarian impulses seriously

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Post by Paul Crider (regular blogger for the site, joined June 2013 as an occasional blogger, promoted to regular blogger July 2013). See:

The clamoring for intervention in the Syrian bloodbath has given Matt Yglesias an excuse to discuss the impressive cost-effectiveness of distributing mosquito-proof bed nets as a form of humanitarian foreign aid. He argues that if the unfortunate plight of foreigners really tugs on our heartstrings, the bed nets are a better deal than bombs by a couple orders of magnitude.

Ivo Daalder, America’s ambassador to NATO at the time, and James Stavridis, NATO’s top military officer at the time, bragged in Foreign Affairs about the extraordinary success of [the Libya] operation:

By any measure, NATO succeeded in Libya. It saved tens of thousands of lives from almost certain destruction. It conducted an air campaign of unparalleled precision, which, although not perfect, greatly minimized collateral damage. It enabled the Libyan opposition to overthrow one of the world’s longest-ruling dictators. And it accomplished all of this without a single allied casualty and at a cost—$1.1 billion for the United States and several billion dollars overall—that was a fraction of that spent on previous interventions in the Balkans, Afghanistan, and Iraq.

That is extremely impressive. What about the Against Malaria Foundation? What they do is provide long-lasting insecticide treated bed nets in order to protect defenseless civilians from a form of biological warfare known as the Plasmodium parasite which spreads via bites from insects of the Anopheles genus. According to The Life You Can Save, handing out these bed nets saves about one life for every $1,865 spent. That’s to say that if the United States was able to spend the $1.1 billion we spent on the Libya operation on long-lasting insecticide treated bed nets we could have saved almost 590,000 lives from almost certain destruction. America’s other allies in Libya spent about $3 billion in total together. That’s something to think about.

A similar argument can be made in favor of facilitating voluntary migration of refugees from the Syrian conflict to destinations of their choice in areas of the world where the risk of death or dismemberment by military violence is less, such as developed countries. (The more general argument has been made on this blog before.) This would be approximately free if the refugees were allowed to work and pay taxes in their newly chosen countries. While it probably wouldn’t be as cost-effective as insecticidal bed nets in terms of lives saved, those lives would be potentially radically improved in terms of expanded human capabilities. Of course bed nets and open borders don’t have to compete. It’s possible that open borders could even magnify the beneficial effects of bed nets in terms of quality-adjusted life-years.

This may seem like a facetious argument, or an impolitic way of roping a serious humanitarian crisis into the service of yet another argument for open borders. But just as my esteemed co-blogger recently argued with the case of sweatshops, if we want to take our humanitarian concerns seriously, liberalizing the immigration policies of the rich world needs to be part of the discussion. Collapsing factories and wars, like natural disasters, act as rare reminders that foreigners are human beings just like us, so these tragic events are the perfect time to press for policies that can do significant good in the world. A couple years ago on my personal blog, I suggested that another thing these events have in common is that their victims have done nothing to deserve their fates aside from running afoul of luck.

I claim that natural disasters and catastrophic misgovernance are morally indistinguishable. If a disaster strikes your country or you happen to be born in North Korea, both events are best described by luck. Unless you’re a Calvinist, you probably agree that bad luck has nothing to do with culpability or just deserts. Then if you accept the premise (perhaps a big if*) that we in rich countries owe some kind of aid to people in nations struck by disaster and that emigration is an optimal kind of aid, then I think it follows that we also owe similar aid to people fleeing grossly incompetent or malevolent governments.

* It’s a big if that a reader will accept the premise, but it’s interesting to note that natural disasters do tend to tug our heartstrings, empirically. You see this in the sudden, worldwide spike in donations to aid organizations and relief efforts when big tsunamis or earthquakes occur.

My asterisked comment is important. We humans seem to be a jumble of contradictions when it comes to recognizing the humanity of others living far away. We are often completely numb to the fates of foreigners when they even partially seem to obstruct our goals. Consider the bored way we skim over collateral damage reports, or the stubborn way we cling to our agricultural subsidies which directly harm the world’s poor. Yet we do appreciate the tragedies of natural disasters and atrocities of war. And it should be noted that even in as militarily adventurous a nation as the USA, wars and bombing campaigns are always presented to the public at least partially as acts of liberation or prevention of even greater violence.

I have argued that the world’s poorest individuals are constantly in the equivalent of a state of disaster and that open borders could help to ease that ongoing disaster. But it seems to be inconsistent with human nature to keep this fixed in the foregrounds of our minds. This is unfortunate but there isn’t much to be done about human nature. Perhaps another approach worth considering is advocating the voluntary immigration of refugees as an effective policy option for those times when we are already psychologically primed for humanitarian action. Every time some bloody dictator catches the world’s attention afresh, there are people who oppose military intervention out of the (quite reasonable) fear that the unpredictable consequences of interference may prove to be worse than non-interference. It’s time for skeptics to start offering the concerned public an alternative policy response: open borders for victims of foreign wars.

Open borders and the economic frontier, part 3

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Last fall I wrote two posts, Open borders and the economic frontier, part 1, and Open borders and the economic frontier, part 2, which were meant to be the first two parts of a three-part series, which sought to address the large macroeconomic question of whether open borders would cause the global economic frontier to move forward faster or slower. BK had made a loose empirical argument in the comments that the more productive ethnic groups seem to be most productive when they are in the majority, less so when they live as minorities among other ethnicities. In part 1, I gave the following reasons why I was skeptical of BK’s empirical analysis: (a) the weakness of the theoretical links between race, cognition, and GDP; (b) the fact that the poor/racially disadvantaged countries are concentrated in the tropics; (c) the pattern that the racial minorities BK’s argument focused on tend to have arrived under imperialist auspices as colonizers or settlers and are therefore particularly alienated from the population; and (d) the prevailing view in our culture that “racism” is scientifically erroneous. In part 2, I explained how, in my own theoretical work, growth is modeled as “exploration of the goods space” through an expansion of the “endogenous division of labor” as capital or population expands, and applied it to the data BK had highlighted. Using the EDOL model, I derived a new theory of relative growth and decline in the 20th century, namely, that the automotive revolution altered economic geography, reducing the economic distance between all manner of points connected by land, while increasing the distance between points separated by the sea: thus Britain and its empire suffered, while the United States and contintental Europe were big gainers, and the Soviet Union also benefited.

But let me step back a bit. Economic growth is very important because, in the long run, small changes in growth rates can alter the human condition enormously. If we can raise the long-run growth rate of per capita income merely from, say, 2% to 3%, that will make our grandkids 70 years from now twice as rich as they would have been if the slower growth trajectory had been sustained. In 700 years, this small change would make our descendants over a thousand times richer than they would have been. Lately, this important topic has become the subject of a large literature, mainly in economics though it spills over to other fields as well. I got a Masters in International Development and a PhD in economics and I’ve been exposed to a lot of this literature, yet I nevertheless feel inadequate to the task of summarizing it. Still, here’s a very rough typology of theories. Continue reading Open borders and the economic frontier, part 3 →

Weekly link roundup 10

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Here’s our weekly installment of links from around the web (see here for all link roundups). As usual, linking does not imply endorsement.

Open borders would abolish Bangladeshi sweatshops

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Substandard working conditions recently murdered over 1,000 people in the deadliest garment factory accident in history. This accident in Bangladesh drew attention to the substandard wages of “sweatshop” workers in the developing world, and industrialists’ scant regard for their workers’ safety. Many on the left in the developed world saw this as an indictment of free market economics, urging government action to prevent such future disasters. Responding to such pressures, the US government recently raised tariffs on a number of Bangladeshi goods. I’m as concerned as anyone that Bangladeshi workers aren’t earning a fair wage or working in dangerous conditions. So it strikes me as strange that utterly absent from this debate has been the one measure that we know for sure would alleviate these conditions for countless Bangladeshis.

If we truly find it disgusting that Bangladeshis aren’t earning a fair wage for their work, or are being forced to work under slave-like conditions, we should ask ourselves: who is trapping Bangladeshis in their antiquated, inefficient economy? Do Bangladeshis really want to risk death every day to earn a pittance?

The standard analysis of this problem points out that the alternative to most Bangladeshis employed in industry is a life of subsistence agriculture. Farmers run the perennial risk of crop failure, and in the developing world, most subsistence farmers literally live hand to mouth, doing backbreaking labour in the sun. Industrial work may be risky, but it’s often a better alternative.

In response, you can argue that if people have to choose between a life of subsistence agriculture versus risking their lives for a job paying 50 cents an hour, this only illuminates the utter rottenness of the choices open to people in the developing world. And you’d be right. But it’s odd that we stop ourselves there. Sweatshops have been debated time and time again for decades, and yet hardly anyone seems to have stopped and asked themselves why these are the only two real choices open to sweatshop workers of the world. What’s keeping the Bangladeshi in the factory from doing the same work at a better wage elsewhere?

The answer, quite simply, is us. By politically and morally legitimising laws that ban Bangladeshis at gunpoint from working in our countries, we have left them no choice but to toil away in sweatshops. If we allowed them to cross borders in search of work, how many of them do you think would embrace the abominable wages and working conditions they’re forced to endure right now? Hundreds of thousands of Afghans literally risk being shot to death today so they can find work in Iran — if we allowed people to search for work across borders, without fear of abuse and murder, how much longer could sweatshops endure?

Part of the reason compensation in Bangladesh is lower than it is elsewhere is simply because of the differences in its economy versus the economies of developed countries: skill and human capital levels are different, the cost of living is different. But a major reason Bangladeshis are so underpaid is because we, the citizens of more developed countries, ban Bangladeshis from earning higher wages. The economic concept of the place premium illustrates this quite well: statistical analysis allows us to take an identical person and predict how their wages for doing the same work would vary depending on which country they work in.

When you consider the place premium, the magnitude by which people in the developed world are underpaid for their work is astonishing. People in the West get upset by wage discrimination on the basis of gender; without adjusting for statistical differences, women might underearn men by almost 30%. The magnitude of wage discrimination on the basis of nationality is so shocking, I cannot find any term to describe it that would be less apt than global apartheid.

For the exact same work that their American counterparts do, Bangladeshis are underpaid by almost 5 times — in other words, they are underpaid by almost 80%. And they aren’t even the worse victims of global apartheid — Yemenis and Nigerians are underpaid 15 times over compared to Americans. If Americans had allowed those dead Bangladeshi workers to work in the US, doing exactly the same work they were doing, not only would they be alive today, but they would be earning 5 times as much.

It is morally unconscionable that our conversations about sweatshops ignore the elephant in the room: we are the ones who put those sweatshop workers to death. It wasn’t just that we bought the goods those workers produced. It was that we banned those workers from working for us in our countries. We forced them to stay in Bangladesh, despite knowing that this would guarantee them an unfair wage and unsafe working conditions. We made them slaves to those sweatshops because they had no other choice — we took all their other choices away from them.

Until labour mobility and freedom of movement become part of the conversation about our economic rights and responsibilities, we might as well not be having any conversation at all. To ignore our immense fault for these people’s plight is morally callous and unjustifiable. In concluding his seminal 1997 essay on sweatshops, Paul Krugman wrote:

You may say that the wretched of the earth should not be forced to serve as hewers of wood, drawers of water, and sewers of sneakers for the affluent. But what is the alternative? Should they be helped with foreign aid? Maybe–although the historical record of regions like southern Italy suggests that such aid has a tendency to promote perpetual dependence. Anyway, there isn’t the slightest prospect of significant aid materializing. Should their own governments provide more social justice? Of course–but they won’t, or at least not because we tell them to. And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard–that is, the fact that you don’t like the idea of workers being paid a pittance to supply rich Westerners with fashion items.

In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.

That is a perfect summation of the case for doing business with sweatshops — except for one thing. Krugman utterly ignored the possibility of allowing the wretched of the earth to serve as sewers of sneakers for the affluent outside their home country. Allowing people to work under alternative economic and legal regimes if they are born into unjust and insensible regimes only makes sense. What reason do we have to not consider this alternative that Krugman couldn’t even bother to list? Are we willing to deny desperately poor people the best chance they have of progress for the sake of an aesthetic standard — because, say, we don’t like the idea of guest worker programmes?

Our conversation today on sweatshops automatically takes open borders off the table. We automatically rule out the one thing that would automatically abolish sweatshops, and automatically give the people of the world a fair choice in determining where they work and on what terms. What reason do we have not to give this proposal serious consideration? It’s our guns and tanks that ban good, honest people from taking better-paying jobs — that ban people from working in safe factories where they won’t have to worry daily about the roof caving in or the machinery catching fire. We need a damn good reason not to consider revoking our ban on people seeking fair work at fair wages.

In our conversations today, I just don’t see those reasons. And so as Krugman says, I don’t see how anyone in this debate can be entitled to their self-righteousness. Anyone ignoring labour mobility, or the fault of the developed world in banning poor people from looking farther for work, has simply not thought matters through. They have not done their moral duty. If you won’t consider open borders as a solution to sweatshops, then don’t bother complaining about sweatshops at all. You’re clearly not interested in solving the problem.