“In the case of Kenyan farmers, if they have any control over the products of their own labour, then their income will be proportional to the profits made.”

First of all, that’s a pretty big “if”. When you say “any control over the products of their own labour”, are you referring to (1) what they produce; (2) how it is produced; (3) who they sell it to; and (4) how much they sell it for? “Any control”, of course, if not a hard test to pass, but “a meaningful level of control”, IMHO would be quite unusual for a small-lot farmer in Kenya who is dependent on cash income from their labour.

The farmer needs seeds, water, and other inputs for his or her crops. Is the farmer free to decide what they grow and how it is grown? It is rather unlikely that they will be selling directly to Tescos or Sainsburys, so there is likely to be one or several intermediaries taking thier cut. Let’s say the farmer grows snow peas, which eventually end up in a U.K supermarket. What percentage of the retail price is the farmer getting? Is it “proportional to the profits made”? Unless it’s a fair trade scheme, which are often used for coffee and a few other items, this seems quite unlikely, but I imagine there are some farmers receiving a fair price. I just cannot see them being anything like a majority though.

kirore1 says:

“But if Western countries do boycott Chinese goods, then at some point the companies will make no profits at all, and then the workers would be worst off, because they will be fired.”

Indiscriminate boycotts are unlikey to be effective. But if a particular product is being produced using inhumane conditions for workers, a targeted boycott might be the way to go. Will the workers lose thier jobs? Possibly. Will they be better or worse off? If the employer improves working conditions or if fired workers are rehired by a an employer with better practices (influenced by consumer-country pressure?), then they are better off.

Trade can be beneficial to a lot of people, but the mythical “free market” is not going to miraculously bring prosperity to the Kenyan and Chinese masses unless the end-consumers demand some bottom line standards be applied to the intermediaries making substantial profits. This might mean higher prices for consumers, but it is still our choice. Is the price worth it?

The current Saga that depresses me is:
the use of scarce resources, that people with few choices will, for low wages / bad working conditions, make into inferior, designed-to-fall-apart “stuff” (cheap but looks good) which is sent across the World and advertised unmercifully so that other “cogs in the system” feel compelled to buy it, use it for a while and then throw it unthinkingly into unsorted landfill … (an incredibly wasteful use of now-very-difficult-to-recover resources.)

Money, originally used as a tool has become “an end in itself” the ‘raison-d’etre’. A few people at the top get very rich, others aspire to do so, and many work in meaningless (and often dangerous) jobs for very litttle renumeration. Thus the resources of this already seriously overpopulated planet are squandered along with the lives of many of the people who are part of this INCREDIBLY STUPID system. In this process we seldom if ever give thought to the other life forms with whom we share this planet.

I mourn the day that Aotearoa so “wholeheartedly” joined into this “cargo cult” mentality. (Sorry, “Free Market Economy” is the official term!)

The big question is “how do we modify what we are doing?” We, as a whole community, urgently need to weigh up the pros and cons (at the personal, local, national and international level) and look to the future.

At least the Greens are doing this …

In the case of Kenyan farmers, if they have any control over the products of their own labour, then their income will be proportional to the profits made. In the case of Chinese workers, this would not be the case. If the companies making the cheap goods made more profits, it would just mean more money for the shareholders and the workers would not profit. But if Western countries do boycott Chinese goods, then at some point the companies will make no profits at all, and then the workers would be worst off, because they will be fired.

I am not sure of what the solution is, but I think the situation is pretty complex with no easy answers.

My comment was highly qualified: “in the short term, some Chinese might benefit”, so I think we are in general agreement.

I also think that a general fall in the cost of manufactured goods through extreme labour arbitrage (i.e. factory wages in China vesus OECD countries) will lead to downward wage pressure in the importing countires. The evidence I’ve seen is the fall in median household income in the U.S. over the last six years, even when based on dodgy CPI stats produced by the Fed.

A lot of analyses on where the benefits of cheap imports are accruing suggest a large chunk is turning up in corporate profits, consumers are getting a small benefit and workers are losing out.

Scott says “It’s pure unadulterated nationalism, of the kind the national front proudly supports.”. Scott, this is just silly name calling - there is no sign of anti-foreigner xenophobia evident here, my preference for NZ-goods is based on reducing transport impacts and keeping my own community healthy and prosperous. If you can demonstrate that buying a foreign-made product benefits the environment (at least some do), I’ll gladly buy it.

It’s questionable as to whether buying cheap foreign stuff benefits people here - cheap imports reduce prices, and this has a resulting effect on inflation. In the real world, most people’s wage rises follow inflation. If it’s low, you get a low pay rise, so any benefits of cheap consumer goods are cancelled out by lower wages. Obviously, the link is only limited and only evident over long time periods.

The free-market fundamentalists would have us believe the market will adjust demand and supply of absolutely everything accordingly, but the market isn’t free, it will be too slow to respond in any case, and we are dealing with human cultures - the last thing you would call rational. As far as I can see, positive outcomes are anything but certain.

But from what I’ve read, the major UK supermarket chains import a lot of vegetable produce from Kenya and other African countries, with a lot of the farms being massive corporate operations employing local people for very low wages and poor conditions. On top of that, if the production is done using a lot of water and chemicals, the soil and acquifers will be depleted, and chemical contamination and salination will result.

Rather than relying on low-wage jobs or selling produce for export at a fraction of the UK supermarket price, the Kenyan farmers would be better off producing their own food and some cash crops in ways that are sustainable. It is quite possible that traditional cash crop income has been destroyed by subsidised US and European products flooding their domestic market and overseas export markets, making them dependent on the aforementioned jobs and crops.

As for Chinese factory workers, in the short term, some Chinese might benefit from production and export of mass produced consumer items for rich-country markets. But in the long term this is not sustainable since their environment and resources are being depleted and degraded at an alarming rate, threatening their health and leading to all sorts of man-made disasters.

On top of that, working conditions are often appalling and can only be maintained that way because of a never-ending supply of rural-to-urban labour migration. When one lot of workers is too ill or angry to keep going, they are sacked and the next lot is wheeled in. Repeat cycle ad nauseum.

In decades gone by, we’ve seen factory-based export-driven growth in East Asia, starting with Japan and moving through Singapore, Hong Kong, Taiwan, South Korea, Malaysia and Thailand. But he scale and ruthlessness of the Chinese factory phenomenon is on a completely new level.

I personally cannot see a happy ending this time. A combination of environmental disaster, Peak Oil and US dollar collapse are possible factors that will lead to an end to the current status quo, IMHO.

It is often claimed that if we did not buy from China that the Chinese would be worse off, because they would be unemployed. I am not sure if this is the case, but I do know that in their recent book on the ethics of what we eat, Peter Singer and Jim Mason argue that it does more good to buy a product from a farmer in Kenya, even though he may only keep about 2% of the profit, than to buy from an already reasonably well off local farmer. The Chinese workers do not own the means to their production like the Kenyan farmer, so this argument may not hold, but I would be interested in comments from the rest of you.

I totally agree with this statement and it is a conversation I constantly find myself having with friends who shop at the Warehouse, but most fail to see the logic of the argument and fail to see the long-term picture either.

Another thing that saddens me is that so many (non-politically active) people I talk to about buying cheaper imported goods seem to genuinely believe that overseas workers are no worse off for this. When I mention their longer work hours and minimum pay I mostly get a response such as “Oh well, the cost of living is much cheaper there, so doesn’t that balance out?” I try to explain that it’s not cost of living but “standard of living” which is the issue and make the connection about the impact this has to employment and wages in NZ. But all I seem to get is blank stares.

Consumer power is a very powerful force IMO, but I just don’t know how we are going to be able to harness that in the face of so much self-centred apathy. I see the need to raise the public awareness of these issues in the media and spread a better understanding of the positive impacts for ordinary workers and the NZ economy. This will hopefully gain wider support to get the bill passed exactly as Rod wanted it.

Kiore1 I am very much enjoying your contributions to this thread, and Mountain Woman - very interesting info as always.

zANavAShi
(�zan�= woman + “vahshi� = set free from captivity : old persian dialect)

yes, product durability and running costs (in the case of housing, etc.) are crucial considerations, but our current system discourages us from thinking about “costs over the entire product life-cycle”, and encourages us to choose the cheapest up-font price.

and using up all the planet’s finite resources as fast as possible is likewise “strongly discounting the future”, or in more common terms, “trashing the future”.