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Prosperity For All

IUF Kommentar- Prosperity For All

Roland Gast, IUF

Indonesian nannies in Malaysia are not often treated well, such as in Sri Lanka and Lebanon where their wages are never secure and often drastically fluctuate. Cases like this prompt people to begin demanding that developing countries abide by basic human rights standards for their workers. Human rights are understood as those basic rights and freedoms to which every individual is entitled. The United Nations Universal Declaration of Human Rights defines them as such: "All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood".  


This demand for human rights may seem like old news, since without respect for basic human rights, modern civilization is no longer conceivable. However, those who advocate for human rights in these particular circumstances see their cause as indubitably valid since they criticize specific businesses and groups in underdeveloped countries. They claim that these businesses violate the labor standards that apply to the rest of the world. While the concern may be warranted, there are usually good reasons for the level and type of standards that apply to companies located in the third world, and these labor standards are in many cases not even related to the basic issue of the protection of human rights. It is actually counter-productive to speak about basic human rights in this broad context.  


To bolster this claim: some producers of textile goods for example, are no longer allowed to invest in poor countries because they are accused of exploiting workers there and ruining the environment. On the other hand, in extreme situations, certain animals indigenous in third world countries are protected and protected from being hunted, even when their use is necessary for the survival of locals who must nourish their families. The type of broad argument forwarded by human rights activists ignores the intricacies of the issue and seeks a solution that may even cause more damage in certain situations. While many agree that people should not live below a certain level, and that these levels are not met in some circumstances, the method of addressing this problem should be sophisticated. Is a six day a week ten hour a day job without vacation exploitative? How does it compare to the working standards of West Germany?  


The people who can answer these questions and develop a more sophisticated solution, are those that are actually affected by the issue. Chinese migratory workers are a popular example. The claim is that they work long hours and are not properly compensated. Nevertheless, they come in crowds to apply for these jobs. What other reason for their interest in them than that they prefer the conditions provided by these jobs over the conditions they flee from in the countryside? Perhaps they would like to have a six or ten week vacation, but of course this doesn't concern them. They are primarily interested in leaving the dire conditions that they come from and working toward a better life within the corporation that provides for at least a stable wage. As another example, German trade unions in the last few years could not afford an increase of 15% in wages if unemployment was to be kept low. There are many more examples that illustrate why a purely theoretically argument for human rights does not fully or properly address the problem. Instead, the discussion should evolve around the principle of supply and demand on the job market. For example, the more each worker costs, a smaller number of workers are employed. This is not inhumane, it's simply a fact.  


Although this argument may sounds unfeeling and lacking a "human face" as many of its critics claim, market forces always look for some kind of a valve. When the store opening times were still very strictly regulated here in Germany, gas stations and small supermarkets suddenly appeared everywhere. There is a give and take with market forces, but one must first understand the nature of markets to accept the argument forwarded in favor of them. Another example from China occurred twenty years ago when special economic zones were created along the coast. As a result, more work was available and the workers migrated there. A higher demand for workers led to continuous price increases. In other words: the Chinese wages rose! This is not yet the case in Germany, but one can imagine that the Chinese migratory workers were able to save and invest and thus create a better life. This raising of living standards and attention to "human rights" came directly as a result of market forces.  


Individuals in developing countries only ask for a place to live with heating, and perhaps air conditioning. As they continue to work they may consider buying a television, a car, and providing good health care and education for their children. Of course, they also demand the protection given by basic negative rights enforced by government. It is only after they have these basic life necessities that they will begin to ask themselves whether they want to work more or less, for whom, and how long they would like their vacation to be. Creating a living standard equitable with the Western world is a process, and it is only after third world workers have had the time and opportunity to acquire and save money, that they can begin to plan for their dreams. Instead of yielding to this natural progression, human rights activists urge these countries to magically expand their supply of goods for immediate distribution. A better solution would be to simply utilize the small amount of resources they have to successfully build the infrastructure and markets that are required.  


This is the idea behind the social free-market economy. It is "social" because it brings each person something, and is "lasting" and "fair" because it provides opportunities for workers to start building their futures from what exists. The question, then, is whether or not it is "inhumane" to allow people to work in factories abroad and in city centers where they earn a multiple of what they would make in their native village.  


Yes, I want current messages of the Institute for Free Enterprise:


Thomas Jefferson (1743-1826)

"I have never been able to conceive how any rational being could propose happiness to himself from the exercise of power over others."

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