Nonsense Ideas About Economics

http://www.capmag.com/article.asp?ID=4927

Some U.S. companies have been accused of exploiting Third World workers with poor working conditions and low wages. Say that a U.S. company pays a Cambodian factory worker $3 a day. Do you think that worker had a higher-paying alternative but stupidly chose a lower-paying job instead? I'm betting the $3-a-day job was superior to his next best alternative.

Does offering a worker a wage higher than what he could earn elsewhere make him worse off or better off? If you answered better off, is the term exploitation an appropriate characterization for an act that makes another better off? If pressure at home forces a U.S. company to cease its Cambodian operations, would that worker be worse off or better off?

It might be a convenient expression to say that the U.S. trades with Japan, but is it literally true? Is it the U.S. Congress and President George Bush who trade with the National Diet of Japan, the Japanese legislature and Prime Minister Shinzo Abe? Or, is it U.S. and Japanese private parties, as individuals and corporations, who trade with one another?

Let's break it down further. Which comes closer to the truth: When I purchased my Lexus, did I deal with the U.S. Congress, the Japanese Diet, George Bush and Shinzo Abe, or did I deal with Toyota and its intermediaries? If we erroneously think of international trade as occurring between the U.S. and Japanese governments, then all Americans, as voters, have a say-so. But what is the basis of anyone having a say-so when one American engages in peaceable, voluntary exchange with another person, be they Japanese, Korean, British, Chinese or another American?

Walter Williams gives some good examples of common misunderstandings about economics. The term exploitation is thrown about today without any thought to its accuracy. There can be no exploitation without force, and last time I checked, the only party using force in any of my commercial transactions was the government. Any interference in the free exchange between individuals results in misery and poverty - ironically, the very conditions the socialists claim to be preventing by interfering.

It is this presumption of need to protect people from their own choices that is central to socialist thought. It's the very reason our society is plagued with victimhood, helplessness, and a lack of dignity. How would someone learn to be responsible for their own actions in an environment where the elite (even those democratically elected) are given a mandate to protect us from ourselves? Is it any wonder there's so much legislation governing how men should do business with each other, far beyond the basic premise - that no man should use force against another (either physical or the force of deception).