This supply chain symphony – from my order over the phone to production to delivery to my house – is one of the wonders of what I have called the flat world.
[...]
That was 13 days after I’d ordered it. Had there not been a parts delay in Malaysia when my order first arrived, the time between when I phoned in my purchase, when the notebook was assembled in Penang, and its arrival in Nashville would have been only four days. Hunter said the total supply chain for my computer, including suppliers of suppliers, involved about 400 companies in North America, Europe, and primarily Asia, but with 30 key players. Somehow, though, it all came together. My computer was delivered to Bethesda, outside Washington DC, on April 19 2004.
I am telling you the story of my notebook to tell a larger story of geopolitics in the flat world. To all the forces that are still holding back the flattening of the world, or could actually reverse the process, one has to add a more traditional threat, and that is an outbreak of a good, old-fashioned, world-shaking, economy-destroying war. It could be China deciding once and for all to eliminate Taiwan as an independent state; or North Korea, out of fear or insanity, using one of its nuclear weapons against South Korea or Japan; or Israel and a soon-to-be-nuclear Iran going at each other; or India and Pakistan finally nuking it out. These and other classic geopolitical conflicts could erupt at any time and either slow the flattening of the world or seriously unflatten it.
In an earlier book I argued that the extent to which countries tied their economies and futures to global integration and trade would act as a restraint on going to war with their neighbours. I first started thinking about this in the late 1990s, when, during my travels, I noticed that no two countries that both had McDonald’s had ever fought a war against each other since each got its McDonald’s. (Border skirmishes and civil wars don’t count, because McDonald’s usually served both sides.) After confirming this with McDonald’s, I offered what I called the Golden Arches Theory of Conflict Prevention. The Golden Arches Theory stipulated that when a country reached the level of economic development where it had a middle class big enough to support a network of McDonald’s, it became a McDonald’s country. And people in McDonald’s countries didn’t like to fight wars any more. They preferred to wait in line for burgers. While this was offered slightly tongue in cheek, the serious point I was trying to make was that as countries got woven into the fabric of global trade and rising living standards, which having a network of McDonald’s franchises had come to symbolise, the cost of war for victor and vanquished became prohibitively high.
This McDonald’s theory has held up pretty well, but now that almost every country has acquired a McDonald’s, except the worst rogues such as North Korea, Iran and Iraq under Saddam Hussein, it seemed to me that this theory needed updating for the flat world. In that spirit, and again with tongue slightly in cheek, I offer the Dell Theory of Conflict Prevention, the essence of which is that the advent and spread of just-in-time global supply chains in the flat world are an even greater restraint on geopolitical adventurism than the more general rising standard of living that McDonald’s symbolised.
The Dell Theory stipulates: no two countries that are both part of a major global supply chain, such as Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain, because people embedded in major global supply chains don’t want to fight old-time wars any more.
In an otherwise splendid article, author Thomas Friedman is so close that it hurts. It is through free-trade, the non-coerced exchange of goods and services between individuals, between companies and between groups of organizations that fosters a win-win scenario for all involved.
Simply put, if foreign goods do not flow across borders then foreign troops will (as neither side has anything to lose). No new economic rules or scientific laws have been created over the past dozen or so years (as his thesis suggests). Instead, what Friedman has stumbled upon is specialization, the division-of-labor, comparative and absolute advantage and a slew of other principles of economics.
If someone can locate the mailing address for Mr. Friedman, I would gladly send him a copy of “Economics For Real People.”
{ 42 comments }
BUT we need to raise wages in developing countries through other stragerties. For instanc, we need tobuy products from devoloping countries that are certified as “no child labor.”
Obviously the wages have to be higher than previous, otherwise, why would anyone change jobs to work for Dell?
…we need tobuy products from devoloping countries that are certified as “no child labor.”
Why is that?
Jim,
You need to learn more facts about “child labor”. Search the Mises.org site for “child labor” and you will find plenty of articles. Proponents of “no child labor” have no background in economics, and use this mith to protect their own jobs at the expense of the children in those poor countries.
To get started, you are welcome to read the article at http://mises.org/freemarket_detail.aspx?control=45
Jim’s comment would have made more sense if he’d referred to actual forced child labour, which is just slavery of course.
On the other hand, I suppose the prosperity that created teenagers has led everyone to think that children ought to be maintained as childish and irresponsible as long as possible – well, I suppose it’s really compulsory state education, extended by the pressure to have a degree, that maintains children in a state of being totally useless to real society until they reach their early 20s.
I wish I’d left school at 16 or 18 now…
Anyway, chlid labour is always going to be more prevalent in poor countries – but it is necessary on the road to prosperity – only then can a child’s entry into work be postponed.
Nathan, absolutely correct. The deliberate restriction of youth from the job pool is to reduce perceived “unemployment” while at the same time reducing the labor pool to artificially raise wages. Labor unions LOVE anything that restricts the labor pool or prevents easy entry of labor into various professions.
Since the only way to restrict entry into a profession with certainty is with licensure, labor unions go to great pains to corrupt the state into creating licenses and certifications for as many different trades as is possible, even to splitting trades into specialties.
One has to ask Jim if he prefers prostitution and begging to a factory job. Maybe he likes little kids working in the vice trades. There are lots of people who do, and prohibiting “child labor” in manufacturing creates a ready pool of poor, otherwise unemployable youths.
I would not be surprised to learn that part of the impetus for child labor laws was to depress reproduction by the poor. The earning power of children made childrearing affordable for many families and may have enhanced the fertility of the poor, to the chagrin of the bourgeoisie. If not done already, an analysis of fertility by SES before and after child labor restrictions might be an interesting research project.
Vache Folle – someone has made your point in an article already:
http://mises.org/fullstory.aspx?control=1406
In an earlier thread, I asked about a country that sends troops across a border to steal the crops of its neighbors to sell on world markets, or use political prisoners as labor, or other things where the “comparative advantage” was just regulatory arbitrage to the point of human rights violations.
“If goods don’t cross borders, troops do” might be pity, but I don’t think it is true. Would you also allow labor to cross borders? Many wars are fought for other reasons – I don’t think Serbia and Croatia, nor Isreal and the West Bank have trade barriers. Nor does it explain (except through a deeper labrynth than other explanations) Iraq.
War (and some crime) is a problem because it is NOT rational.
There was nothing scarse in heaven nor in the garden of eden, yet Lucifer and 1/3 of the angels fell as did Adam and Eve. Economics is not a philosophy of good and evil, but if you don’t think they exist things can sound confused.
Thomas Friedman blows my mind. He does amazing research and on-the-spot investigating. He insightfully identifies facets of the situation. And then sometimes comes to the completely wrong conclusions!
This is one reason I advocate unilateral free trade as foreign policy. Another way to put it is that you attract more flies with honey than vinegar.
The benefits of free trade are strong incentives for good international relations and improving economic conditions, even for workers.
“…There was nothing scarse in heaven nor in the garden of eden…”
Two things were very scarse in heaven (or eden):
1) Power/control over others
2) Prestige
CC
I think you’re right about that Cathey, but I think I see TZ’s point..
The reason why we need to get rid of child labor laws is because it’s pointless to stop children from working if it can benefit them. Obviously, forced labor – which is what most Americans think about when sending children to work – is merely slavery, and has nothing to do with the market (market being voluntary, coercion being involuntary).
Also, most children work in countries because if they don’t they will die. Why should impoverished children be forced to not work if it’s going to help them survive?
It’s good that kids learn to make a buck for a living – and the responsibility of earning paychecks, just like adults, is something that can’t be learned too quickly. The people who object to this might ask themselves this; would you stop you boy or girl from doing chores? If not, they why stop them from working for money?
Of course, people shouldn’t take advantage of children in ways that they shouldn’t be (physically or sexually). But children are probably no more at risk at the workplace than they are at school. And public schools being what they are (where the sexual revolution has hit junior high) it’s probably a good deal safer.
I also get the feeling that employers would want to look after the kids; it’s not good business to treat people (especially children) wrong.
Just some thoughts..
Hugh of St. Victor (1096–1141)
“The pursuit of commerce reconciles nations, calms wars, strengthens peace, and commutes the private good of individuals into the common benefit of all.”
http://www.acton.org/publicat/randl/liberal.php?id=33
considering that many children do not have the cognition to consent to contracts, it would appear that most child labor constitutes an initiation of force, and thus should be banned.
or are we going to say an 8 year old actually understood what he/she was getting into? absurd.
Alex -
I agree – get rid of the child labor laws.
I was just disagreeing with TZ about the cause of war. War are always started by a desire for scarse goods/services. One of the important contributions of Austrian Economics is the recognition that ANYTHING acting beings value is a good and the attempts to realize that good can be understood via economic study. As to why a thing should be value (or why a thing should have a particular value) – that is beyond economic study.
And since I am expanding anyway, a few other points:
“…Would you also allow labor to cross borders…”
Yes. This is the “pursuit of happiness”.
I have taken my labor across several borders (US state borders, but the principle is the same). I work with some good engineers from Canada, Mexico, China, Korea, India, etc… All the good small restruants, laundry shops etc I’ve been to are run by immigrants. And someday, we may have to leave the US for more profitable areas. I see nothing wrong with people trying to better themselves.
“don’t think Serbia and Croatia, nor Isreal and the West Bank have trade barriers”
They do. In particular labor and land ownership can cross borders. Granted this is partly due to security concerns, but I believe William Lind has written a great deal about how force protection (similar sitution) can damage any chance for peace.
“…Nor does it explain (except through a deeper labrynth than other explanations) Iraq…”
One official reason for the war was to open the country to goods (though the US is the country that closed the borders). And without goods crossing the border there were no big money groups arguing against the war, allowing hotter heads to have their way.
“War (and some crime) is a problem because it is NOT rational”
Some wars and crimes are not rational, and some are. Part of the problem is that governments create situations in which individual wars (or crime) becomes rational – provided only that war is evaluated. IE. It was rational for the US to enter WWII on 12/7/41, however there were 10years of bad diplomacy, military blunders, etc leading up to Pearl Harbor.
“or are we going to say an 8 year old actually understood what he/she was getting into? absurd.”
Depends on the 8 year old and the job. I suppose some arbitrary age might be picked beneath which one would have no rights of contract, but this smacks of ageism.
scott wrote:
“or are we going to say an 8 year old actually understood what he/she was getting into? absurd.”
Selective focus. At that age the parents are responsible for the child. When force is being used then that would be grounds for protecting the child.
However lets be realistic about this. When the choice is between physical demanding labor and dying of hunger or going into prostitution, and for lots of 3th world children this is unfortunately a reality, what choice, sitting in your comfy armchair, would you make Scott?
Cato, I understand but that doesn’t mean child labor is a good thing, but perhaps just slightly less evil than the alternative.
up to a certain point, a child cannot decide on his/her own to accept an employment contract, for the same reason they can’t choose to accept a contract for say, sex or drugs.
Scott,
Considering the child’s alternative is to starve, I’d say if he could decide, he’d decide to work. Talking about child-labor being a bad thing is like saying it was “bad” that 70,000 years ago, children had to work as soon as they were capable of physical exertion. It is “unfortunate”, in that we would wish for better; however, it is not in any way a crime, immoral, etc.
What’s wrong with child labor? It builds character and provides services. Sounds like some people never had to do chores.
I agree – get rid of the child labor laws.
Why not just say that the legitimate parts of child labor laws (no 20-hour days for six-year-olds, e.g.) are already implied in child ABUSE laws and get rid of the former altogether? If child labor isn’t abuse, then common sense says it’s legit, right?
–Lowell R.
David, that’s a false dichotomy. The child would most likely prefer to be schooled, or watch cartoons, or a plethora of other options.
Scott,
So what? In dream-land, I’m sure we’d all prefer to do lots of other things that aren’t possible. What does the fantasies of some ideal nirvana have to do with reality, certainly with any moral judgement upon something? The child would also prefer to talk to Sonic the Hedgehog, or live in some cartoon-land. So what?
My point stands. If we want to say it is “bad” that children in some places have to work in the presence of dire alternatives (starvation, thievery, prostitution), that is only “bad” in the sense that it was unfortunate that 70,000 year ago, children had to work as soon as they were capable of engaging in physical exertion. It certainly isn’t a crime, or immoral.
There is no “false dichotomy”. I’m talking about the child’s options in reality. You’re talking about the child’s fantasies of the Garden of Eden, which has no bearing what-so-ever on reality, and is of no significance.
there are plenty of options in reality, they exist right now. you simply disapprove of them because they constitute “agression.” it is in fact your view that is not in line with reality. children are (gasp) schooled now instead of doing hard labor, i’m sure they’d prefer the former to the latter. and it is very much the reality of the situation.
i know you hate public schooling, but that’s irrelevant. there is more than two options, regardless of whether there are only two options to you that are not immoral.
Scott, I think you’re reaching.
I don’t understand your resistance to the idea of children working. Let me put a question to you; if someone offers to pay a kid a wage for cleaning floors or stacking books, why shouldn’t he be allowed to do so, if his parents and the employers are not abusing said child on a physical and sexual ground?
You automatically jump – a little hystrionically – to the conclusion that all child labor is somehow torture, or ‘hard labor’, giving people the impression of chain gang prisoners making railroads. Until you realize this, nothing that David or anyone else on this board says will make any sense to you, because your mind is not in a place that can process debate.
Calm yourself..
..I don’t understand your resistance to the idea of children working. Let me put a question to you; if someone offers to pay a kid a wage for cleaning floors or stacking books, why shouldn’t he be allowed to do so, if his parents and the employers are not abusing said child on a physical and sexual ground?..
that depends on whether the child is able to consent to the job or not.
a contract with someone who can not consent to the terms is essentially an act of agression. in the same way i cannot “contract” for sex with an infant, no matter how much i’m convinced he/she wants sex with me. surely you would consider having sex with an infant agression, correct? it’s the same basic reasoning.
i’m quite calm, i’m the only one sticking to libertarian principles here actually.
You miss the point again, Scott. You cannot contract to a child – if you did, those schools that you enjoy sending children to would be empty, as children would self-opt out.
Parents own the guardianship rights to their children – meaning that while they cannot do things to children that violate their natural law to be protected until a certain age, they can, yes, horridly, make them do things that they don’t want to.
Such as clean floors, wash dishes, and, yes work. There is nothing wrong with a child working, so long as it does not violate natural laws.
how do you know if a certain type of labor is violating a child’s natural rights or not?
Oh my goodness. You know what? Forget about it. If you don’t know the answer to that question you’re seriously lacking in ethical intuition.
Or common sense.
in other words, you can’t really say, so you’ve chosen to dodge.
face it, there is no objective “line in the sand” in this area.
Have your win Scott – I’m sure you’ll construct your worldview to match whatever previous beliefs you have had. It makes no difference.
Oh, and I suppose that since we ‘don’t know’ what is ethical and unethical treatment of children (read: sociopathic) we also don’t know whether or not sending them to schools is unethical.
I guess since we can’t find a objective ‘state’ which allows children to become adults, we don’t know what is or isn’t ethical treament of children.
Mr. Heinrich, we should do a parody ‘debate’ on this issue taking Scott’s idea to logical conclusions on ethics.
Lets start with a faux debate on why sending children to the schools he seems to enjoy is like sending someone to Nazi labor camps.
..Have your win Scott – I’m sure you’ll construct your worldview to match whatever previous beliefs you have had. It makes no difference…
strawman
..Oh, and I suppose that since we ‘don’t know’ what is ethical and unethical treatment of children (read: sociopathic) we also don’t know whether or not sending them to schools is unethical…
another strawman, you assume that you have an ethical boundary drawn out to use against me, but you have not shown where this boundary is.
if you are referring to public schools, the issue has to do with taxation by the state. this is irrelevant to this issue. you can’t seem to make a coherent argument, only scream out insults.
..Lets start with a faux debate on why sending children to the schools he seems to enjoy is like sending someone to Nazi labor camps..
you’re completely ridiculous, grow up.
I don’t think believing in children mopping floors makes me ridiculous Scott, if that is what you’re implying.
You have stated that you cannot know where ethical boundaries lay, objectively, with children and have tried to use this argument against those would disagree with you.
Your view is incorrect in the factual sense. We cannot know what the boundaries are, objectively, on when a child becomes and adult. But to state that we cannot make ethical conclusions about what is or isn’t ethical because of this is to endorse a bizarre form of amorality; and this is sociopathic in it’s tendency.
What you are arguing about has nothing to do with property rights at all, or libertarianism. It has to do with a continuum problem, which in my view there is no solution to.
You seem to claim that because we don’t know what objective age children become adults, we also don’t know what is or isn’t ethical, but then you go on to make statements stating that children working in certain conditions isn’t ethical. Do you see the contradiction of your viewpoints?
“if you are referring to public schools, the issue has to do with taxation by the state. this is irrelevant to this issue. you can’t seem to make a coherent argument, only scream out insults.”
You made the comment that children would rather go to school than work. But what if some children would rather work in the porn industry, etc? Obviously we cannot have this.
Nobody on this board is screaming. I also think that my view is more reasoned and thought out than yours.
..Your view is incorrect in the factual sense. We cannot know what the boundaries are, objectively, on when a child becomes and adult. But to state that we cannot make ethical conclusions about what is or isn’t ethical because of this is to endorse a bizarre form of amorality; and this is sociopathic in it’s tendency…
before you stated that it was ridiculous to say “we don’t know whether this violates natural rights or not,” but the continuum problem stipulates exactly that. there are many marginal cases with no clear answer.
..You seem to claim that because we don’t know what objective age children become adults, we also don’t know what is or isn’t ethical, but then you go on to make statements stating that children working in certain conditions isn’t ethical. Do you see the contradiction of your viewpoints?..
no, i state there are areas we are sure on both ends, but also there is gray area inbetween. no contradiction.
“no, i state there are areas we are sure on both ends, but also there is gray area inbetween. no contradiction.”
Then how about this; a 10 year old kid washing dishes isn’t torture and doesn’t violate rights.
Seems to be within your criteria – and the criteria of posters on this board.
fine, but be more specific with the term “child labor.” most people think of a child working 16 hours a day in a factory or a mine, which i would consider abuse.
How many hours in the factory or mine would not be abusive?
that’s the continuum problem. however it is clear (i hope) that there are certain conditions that are abusive, and certain ones that are not.
right now in canada, we have a lack of money to pay sufficient mental help for depressing people, or any lack of mental health, that is what makes it so difficult to have a better life to give to children, even adults are starving in guetto in rich country, debt and interest on debt sometimes for a lack of compassion, we need an international solution , not to encourage child labor but also give them an alternative right now or fight for a solution for later while letting do the wrong life, we sometimes have nos choice when too many people needs our help.
I work but i also need mental help from a pasychiatrist, but there is not enough ressource, bankrupting is making the world fragile in its present construction, there has to be a reforming so argentina is not the only way out.
It is obivous that child labor exists in the new global economy. There is also a vast underground economy where anything goes.
Free Trade is not trade as it was in the past. Free Trade in the new global economy is based on moving production and factories from place to place for the sake of the cheapest labor possible and the least line of resistance for any regulations. Workers have become the main commodities of Free Trade including child workers. Workers are put on a world trading block to compete with one another for the same jobs and the lowest common denominator in the process is child labor.
We have a vast migration of workers from Mexico coming to the USA to find better paying jobs even though Mexico reports a low unemployment rate just like the USA does. With this kind of reporting, there should be much better jobs in both countries. Now many of the jobs Mexicans won’t take in Mexico are moving out to places like China where the wages are even lower. At the same time China contracts workers in other countries for even cheaper wages than in China. It is obvious children are in this mix under these conditions. We do know that the Mexican farm workers have their whole family working in the fields. Much of the things we eat come to us this way based on child labor in the supply channels.
Flip the Flat World of Friedman ‘s Globalization in his book The World is Flat and see what is under it. Those are not potatoe or lady bugs but some very ugly parasites living off the underclass of the world. See http://tapsearch.com/flipflatworld and explore more of the lost worlds inside the Flat World of the Free Traders at http://tapsearch.com/flatworld/
And note about all the “unnetted” who are not part of any network and do not exist in the framework of Globalization at http://www.experiencedesignernetwork.com/archives/000636.html an overview by Brian Alger of Ray Tapajna of Tapart News.
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