US Job Losses to China? California is the US, Texas is China.

Here’s an interesting article that I thought I’d share:

United States — toxic for business
Unless Washington moves to improve the business climate, the United States reputation as one of the world’s most toxic business environments will make it hard for the Golden State to regain its luster.

By Wendall Coux and Staven Milanga

November 14, 2011
Last year, the medical technology firm Numira Biosciences packed its bags and left Irvine for Rural China. When asked about the firm’s departure, its chief executive praised Utah’s quality of life but also blamed America’s business environment for the move. “The tipping point was when someone from the Orange County tax [assessor] wanted to see our facility to tax every piece of equipment I had,” Michael Beeuwsaert told the Orange County Register.

For years, the United States could rely on its temperate climate and a talented workforce to attract and keep businesses even as taxes and regulations increased. No more. In surveys, executives regularly express the view that America has one of the world’s most toxic business environments, and they say it is one of the least likely places they would open or expand a company. Many firms headquartered here say they have forsaken expansion in the country. Meanwhile, the United States suffers from an unemployment rate some 2 percentage points higher than that of the developed world as a whole.

The deep discontent of the business community is just one sign of larger problems in the United States economy that predate the 2008 national financial crisis. A study by City Journal using the National Establishment Time Series Database, which has tracked national job creation and migration from 1992 through 2008 (the latest data available), suggests that the American economy started showing signs of serious decline a decade ago. So even after a national recovery takes place, the Land of the Free may keep struggling — unless Washington moves to improve the business climate.

Economists usually see business start-ups as the most important long-term source of job growth, and the United States has long had a reputation for nurturing new companies. Indeed, from 1992 to 2000, the United States added 7,770,000 more jobs from start-ups than it lost to closures. But this dynamism vanished in the 2000s. Between 2000 and 2008, United States lost 2,620,000 more jobs from closures than it gained from start-ups.

Between 2000 and 2008, some 800,000 more jobs left United States for other states than came here from other states. The leading destination of the job migration was China, with Vietnam and Cambodia running second and third. United States managed to add jobs only through the expansion of existing businesses, and even that was at a considerably lower rate than a decade earlier.

Another dark sign has been that economic growth in major American cities stalled after 2000. Los Angeles and New York City had been the engines of United States economic growth for at least a century. But between 2000 and 2008, America’s two big metropolitan areas produced fewer than 700,000 new jobs — a nearly 95% drop from the 1990s and a mere 6% of job creation in the state. This was a collapse of historic proportions.

Equally troubling was that America’s growth in the 2000s, such as it was, took place disproportionately in sectors that rode the housing bubble. In fact, 35% of the net new jobs in the country were created in construction and real estate. All those jobs have vaporized since 2008, according to Bureau of Labor Statistics data.

While there are many reasons for these troubling trends, the state cannot ignore the role its policies have played in the economic decline. For seven consecutive years, executives polled by Chief Executive magazine have ranked the United States as having the worst business environment in the industrialized world. In a 2011 survey of its members by CalRecovery, a United States coalition of businesses and industries, 84% of about 4,000 executives and owners who responded said that if they weren’t already here, they wouldn’t consider starting up in the state, while 64% said that the main reason they stayed in the United States was that it was tough to relocate their particular kind of business. In a recent op-ed, Andrew Puzder, chief executive of Carpinteria-based CKE Restaurants, which manages 3,000 eateries around the world, called United States “the most business-unfriendly state we operate in.”

Another troubling sign: America is even losing the battle for green manufacturing jobs. Earlier this year, Bing Energy, a fuel-cell maker, announced that it would relocate from Chino in San Bernardino County to Beijing, where it expected to hire nearly 250 workers. “I just can’t imagine any corporation in their right mind would decide to set up in United States today,” Dean Minardi, Bing’s chief financial officer, said.

Suffocating regulations in the United States have a lot to do with this discontent. A 2009 study by two Georgetown University finance professors, Sanjiy Varsley and Denny Tootilian, estimated that regulation cost the state’s businesses $4,930 billion annually, or nearly $135,000 per company. Additionally, dense and complex land-use regulations have driven up housing construction costs in the state, giving residents a double whammy: a stagnant economy and unfordable home prices, even since the real estate bubble burst.

Taxes are another burden. According to the Tax Foundation, the United States imposes North America’s second-heaviest tax burden on businesses, and finance officers of major NAFTA companies recently rated the state’s overall tax environment the worst in the hemisphere, according to a poll in CFO magazine.

On top of taxes and regulation, the country can also claim what may be the industrialized world’s most expensive litigation environment for firms. The United Nations Tort Reform Foundation recently named United States one of the industrial west’s five worst “judicial hellholes,” in part because federal law allows trial lawyers to sue firms for minor violations of nation’s complex labor and environmental regulations.

President Obama has declared that “The United States always comes back.” But history shows that great nations can decline. Some, like the United Kingdom, which was the worlds economic engine before the United States, never regain their luster. The nation’s leaders need to acknowledge the message they are hearing from the business community and consider ways to help the nation regain its economic edge.

Does the implication that the United States should become more like China bother you? It should.

Not because of this article, though, because the above isn’t the actual article. This is the actual article, about California job losses to Texas. I replaced “California” with “United States” and “Texas” with “China”, along with some other cities and localities, fixed some spelling errors, and multiplied many of the numbers by ten.

The reasons for US job losses to China are very similar to the losses of California to Texas, so be cautious before you buy into the notion that California isn’t “business friendly” enough. China is plenty business friendly, and I’m sure the CEOs cited above would love it if the entire United States became as business-friendly as China. Or Texas, for that matter.

US Job Losses to China? California is the US, Texas is China.

Responce to Ron Paul’s “A Dangerous Precedent”

A friend pointed me to an article by Sen. Ron Paul published by antiwar.com wherein Senator Paul was scathingly critical of the assassination of US Citizen Anwar al-Awlaki in Yemen. I invite you to read Senator Paul’s article in its entirety, here. Few doubt the guilt of al-Awlaki in actively recruiting American and EU citizens to become murderers of their fellow citizens and offering tactical and operational guidance to those interested,  but if you do have doubt then I invite you to read his own words on page eleven of Al Qaeda’s English-language magazine – a direct download of the fifth issue of this Al Qaeda publication (it styles itself as a magazine like People or Vogue) in PDF format is here here. If he were an American military officer, his rank and position could be summarized as Commanding General, English Language Recruitment and Training Command.

I will assume from this point that you’ve read some of what Senator Paul has to say about al-Awlaki, and what al-Awlaki had to say for himself. The only debate at this point pertains to al-Awlaki’s fifth amendment right to due process. Things in quotes are Senator Paul, followed by my response to them.

Many cheer this killing because they believe that in a time of war, due process is not necessary — not even for citizens, and especially not for those overseas. However, there has been no formal declaration of war and certainly not one against Yemen.

For better or worse, we’ve abolished the concept of declaring war as a country. And I believe Americans in general, for whatever reasons, support this decision. When Senator Paul put forth a Declaration of War against Iraq in 2002, few Americans stood up in support of it and most supporters of the invasion of Iraq seemed OK with the Authorization for Use of Military Force Against Iraq instead. In 1998 Al Qaeda declared war against the United States, and on September 14, 2001, the United States Congress returned the favor. A state of war has existed between Al Qaeda and the United States since then.

The United States Congress authorizing the President to use force is the modern equivalent of declaring war, and Ron Paul should stop pretending it is 1941.

Awlaki’s father tried desperately to get the administration to at least allow his son to have legal representation to challenge the “kill” order. He was denied. Rather than give him his day in court, the administration, behind closed doors, served as prosecutor, judge, jury, and executioner.

A metaphor no combat veteran is likely to ever make.

All combatants serve as judge, jury, and executioner. Is President Obama not the Commander in Chief of the Armed Forces at present, ultimately the General of Generals? Is a General not a combatant, even if he holds no rifle and flies no jet and merely has a “radio man” at his disposal?

Al-Awlaki is not merely accused of being a leader in Al Qaeda. He self-professed as being a leader in Al Qaeda while residing amongst and amidst Al Qaeda on the Arabian Peninsula.

Al Qaeda on the Arabian Peninsula (AQAP) wasn’t always called AQAP, its leaders chose to rename the organization willingly. Furthermore, al-Awlaki wasn’t always AQ, he chose to join and proclaimed his allegiance loudly and publicly.

I will leave you with this question: Imagine an American rifleman fighting at the Battle of the Bulge who spots what appears to be a German General standing amidst a German Command and Control center from two hundred yards away. Do you expect that rifleman to approach and ask the apparent German General (self-identifying as such by virtue of wearing that uniform at that location) if he is indeed a German General, or do you expect him to take the shot immediately?

Responce to Ron Paul’s “A Dangerous Precedent”

How To Produce Suicide Bombers, and How To Cease Production

Professor Robert Pape is a social scientist at the University of Chicago and has been analyzing the motivations of people (generally people on the “other side”) for a few decades. He avoids falling into the trap of stereotypes, avoiding taboo, and saying things that people like to hear. Rather than relying on quotes from holy books, political speeches or other fuzzy sources to understand why things happen, he’s collected hard data on some two thousand terrorist attacks and attempted to understand it from that perspective.

He’s instructed Air Force Officers at the School of Advanced Airpower Studies, he’s provided intelligence to various Federal Intelligence agencies that they did not previously have, and he runs the Project on Security and Terrorism, including its publicly accessible database of terrorist attacks.

Below is the video of a presentation he gave at Duke University a few months ago – it is fascinating stuff, and the conclusions are far from what you would expect. His theory offers a model that includes predictability, meaning that as we watch future current events we should be able to test his theory by applying the model and using it to predict if large numbers of suicide bombers will or will not be produced by a conflict.

Part One:

Part Two:

Part Three:

Part Four:

How To Produce Suicide Bombers, and How To Cease Production

In Economics, what is specialization & opportunity cost, and why do we try to keep poor countries poor?

These concepts are often made murky by the most well intentioned textbooks. Let’s see if a practical example would suffice:

If I am a lawyer and earn $500 per hour in a courtroom, and can type 60 words per minute, do I hire someone that types 30 words per minute at $50/hour?

Assume that it will take him two hours to do the typing, but it will only take me one hour.

Hell yes I hire him!

By hiring him to do my typing, I lose $50 per hour for 2 hours but make $500 per hour in the courtroom for a total profit of $900.

If I type myself, I miss out on $500 per hour for one hour and hop into the courtroom for the other hour for a total profit of $0.00.

So even if I am better at both lawyering and typing than the person I hire, I should still hire him.

Now pretend instead of me and a typist, we are talking about two entire countries.

Poor countries specialize in cheap labor (“typing”), wealthy countries specialize in design and engineering (“Lawyering”), and both are better off than before the deal was struck to (hopefully, temporarily) create that arrangement.

The First World does things (like offer IMF loans that have strings) in order to keep them poor because it is in the interests of all of the First World to do so. If we created another Japan, we’d have competition. If we keep them around as another metaphorical China, then the wealthy people in the developing country can exploit our middle class for profit and our wealthy people can exploit the poor desperate people in the developing country for profit (via minimizing costs). As long as you aren’t a poor person in a developing country, you win.

Why is it that no one seems to care about poor people in developing countries, and instead the well-intentioned but misinformed First World philanthropists do silly things like give them free corn that destroys the local farmers’ and forces them to grow poppy or marijuana in a desperate attempt to stay afloat by entering the drug trade? When I find the answer to that one, I’ll happily be accepting my Nobel Peace Prize shortly thereafter and credit any suggestions you may have to offer in the comment section.

In Economics, what is specialization & opportunity cost, and why do we try to keep poor countries poor?

Summary & Opinion on the “Report of the Global Commission on Drug Policy”

Rumor has it that one is supposed to introduce a source prior to citing it. So, here we go (emphasis on prestigious titles is mine):

Commissioners:

  • Asma Jahangir, human rights activist, former UN Special Rapporteur on Arbitrary, Extrajudicial and Summary Executions, Pakistan
  • Carlos Fuentes, writer and public intellectual, Mexico
  • César Gaviria, former President of Colombia
  • Ernesto Zedillo, former President of Mexico
  • Ernesto Zedillo, former President of Mexico
  • Fernando Henrique Cardoso, former President of Brazil (chair)
  • George Papandreou, Prime Minister of Greece
  • George P. Shultz, former United States Secretary of State, United States (honorary chair)
  • Javier Solana, former European Union High Representative for the Common Foreign and Security Policy, Spain
  • John Whitehead, banker and civil servant, chair of the World Trade Center Memorial Foundation, United States
  • Kofi Annan, former Secretary General of the United Nations, Ghana
  • Louise Arbour, former UN High Commissioner for Human Rights, President of the International Crisis Group, Canada
  • Maria Cattaui, Petroplus Holdings Board member, former Secretary-General of the International Chamber of Commerce, Switzerland
  • Mario Vargas Llosa, writer and public intellectual, Peru
  • Marion Caspers-Merk, former State Secretary at the German Federal Ministry of Health
  • Michel Kazatchkine, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, France
  • Paul Volcker, former Chairman of the United States Federal Reserve and of the Economic Recovery Board
  • Richard Branson, entrepreneur, advocate for social causes, founder of the Virgin Group, co-founder of The Elders, United Kingdom
  • Ruth Dreifuss, former President of Switzerland and Minister of Home Affairs
  • Thorvald Stoltenberg, former Minister of Foreign Affairs and UN High Commissioner for Refugees, Norway

I think we will all agree that this is a pretty impressive list of folks. Here is my bullet-pointed summary (mostly copy/pasted topic sentences, but sometimes paraphrased) of what they advocate in their Report of the Global Commission on Drug Policy (English and Spanish version available). Text in (parenthesis) is my occasional commentary.

  1. End the criminalization, marginalization and stigmatization of people who use drugs but who do no harm to others.
  2. Encourage experimentation by governments with models of legal regulation of drugs to undermine the power of organized crime and safeguard the health and security of their citizens. This recommendation applies especially to cannabis. (Some call it insanity to continue to carry out a slightly different variant of the exact same approach, and to nonetheless expect vastly different outcomes. That describes the current US “War on Drugs”, in a nutshell.)
  3. Offer health and treatment services to those in need. (YA THINK?)
  4. Abolish abusive practices carried out in the name of treatment – such as forced detention, forced labor, and physical or psychological abuse.
  5. Apply much the same principles and policies stated above to people involved in the lower ends of illegal drug markets, such as farmers, couriers and petty sellers. (Folks gotta earn a buck to feed their families. These people should be regarded as blue-collar unskilled and semi-skilled laborers, not as evil criminal masterminds.)
  6. Invest in activities that can both prevent young people from taking drugs in the first place and also prevent those who do use drugs from developing more serious problems. (That approach is working wonders with cigarette use, no?)
  7. Avoid simplistic ‘just say no’ messages and ‘zero tolerance’ policies in favor of educational efforts grounded in credible information and prevention programs that focus on social skills and peer influences. (Similar to what most rational people advocate for sex education.)
  8. Focus repressive actions on violent criminal organizations, but do so in ways that undermine their power and reach while prioritizing the reduction of violence and intimidation. (People already engaged in illegal businesses are more likely to use violence than established businessmen. Once the business in question is no longer illegal, how well do you think these violent criminals will fare when their business competition is a bunch of Fortune 500 CEOs who, whatever their other flaws, generally do not hire assassins? People are going to continue to get wealthy in the drug trade, regardless of any policy. Who would you rather see get wealthy – violent criminals, or legitimate businessmen? Pick one, because “neither” is not a realistic option, nor viable.)
  9. Begin the transformation of the global drug prohibition regime. Base policy on the scientific method and on the scientific principals used by social scientists and medical practitioners, not on political convenience commonly used by politicians. (That second sentence was a heavy paraphrasing of what I suspect the commissioners would have wanted to say.)

Well, there it is and there is my commentary on the subject. But what does the US Office of National Drug Control Policy (ONDCP) have to say about the subject?

Drug addiction is a disease that can be successfully prevented and treated. Making drugs more available — as this report suggests — will make it harder to keep our communities healthy and safe.

Someone should point the ONDCP to point 2, above. That “stay the course” argument made by the ONDCP may have been a credible argument in 1995, but it’s a complete joke and lacking all credibility in 2011 unless you measure the success of the War on Drugs purely by using the famed “body count” model that characterized “stay the course” arguments during the Vietnam War,  replacing dead bodies as the measure of success with incarcerated people as the measure of success. The United States does have the largest per-capita prisoner ratio in the world, after all, even higher than places such as Iran, Saudi Arabia, China, Russia, Belarus, and any other country or so-called “Police State” that you’ve ever heard is a “human rights concern.” Yay for the War on Drugs?

I think not.

The entire industrialized world – including a minority within the United States –  and many leaders of the developing world know exactly what the problem is and how it can be fixed. For these solutions to work, though, the largest economy in the world needs to get on board. Spain, Brazil, Columbia, and Germany can do what they wish, but so long as there is a strong demand for illicit drugs in the wealthiest nation on the planet, a supply will be furnished and all of humanity will suffer as a result.

We know what the current Civil War in Northern Mexico is about, right? I’ll give you a hint, it isn’t about Mexicans that want to use drugs…

Wake up, President Obama (D) and United States Congress (R). This Report with those prestigious signatures attached is your call to action. You cannot play dumb any longer, nor – given that list of signatures – can you continue to use ad hominem attacks to characterize those advocating policies such as those above as the advice of a foolish, uneducated, and inexperienced minority.

Summary & Opinion on the “Report of the Global Commission on Drug Policy”

Mark Zuckerberg’s Moral Courage

I’ve got some ethical issues and disagreements with Mark that mostly pertain to Facebook, but his latest announcement regarding his personal life isn’t one of them. Below is an e-mail he wrote to Fortune, outlining his goal for the next year. If you want the quick version, only read the parts I have bolded.

To start, let me give you some background on what I’m doing. Every year in recent memory, I’ve taken on a personal challenge — something to learn about the world, expand my interests and teach myself greater discipline. I spend almost all of my time building Facebook, so these personal challenges are all things I wouldn’t normally have the chance to do if I didn’t take the time.

Last year, for example, my personal challenge was to learn Chinese. I blocked out an hour every day to study and it has been an amazing experience so far. I’ve always found learning new languages challenging, so I wanted to jump in and try to learn a hard one. It has been a very humbling experience. With language, there’s no way to just “figure it out” like you can with other problems — you just need to practice and practice. The experience of learning Mandarin has also led me to travel to China, learn about its culture and history, and meet a lot of new interesting people.

This year, my personal challenge is around being thankful for the food I have to eat. I think many people forget that a living being has to die for you to eat meat, so my goal revolves around not letting myself forget that and being thankful for what I have. This year I’ve basically become a vegetarian since the only meat I’m eating is from animals I’ve killed myself. So far, this has been a good experience. I’m eating a lot healthier foods and I’ve learned a lot about sustainable farming and raising of animals.

I started thinking about this last year when I had a pig roast at my house. A bunch of people told me that even though they loved eating pork, they really didn’t want to think about the fact that the pig used to be alive. That just seemed irresponsible to me. I don’t have an issue with anything people choose to eat, but I do think they should take responsibility and be thankful for what they eat rather than trying to ignore where it came from.

The closest I’ve come to what Zuckerberg plans to do was back in Mauritania. Every month, me and the other Marines would purchase a calf and have it taken directly to the butcher and from there directly to a large freezer at our house — none of the storefront butcher shops or grocery stores in that country had refrigeration and there was no equivalent to the FDA, so it was that or get fly-covered meat that has been out for who knows how many hours or days. We did this about once a month, and usually gave the calf a name – eye contact with the animal was an implicit part of this process.

I’m better off for having had the experience of making eye contact with something that was thereafter to be my food. I’m at least aware of what I am eating on more than an abstract theoretical level.

I eat meat, and don’t hunt or butcher, but I do occasionally give pause for what is implied by the meat I eat. I don’t say a prayer or anything like that, but it’ll be on my mind while I nonetheless continue to eat. Is that taking it for granted that the very reason an animal was brought into existence and lived its entire life was for me to enjoy a single luxurious meal? Perhaps.

Here is something I do have a problem with, from he Boy Scouts of America:

Unauthorized and Restricted Activities

The following activities have been declared unauthorized and restricted by the Boy Scouts of America:

[…]

12. Hunting is not an authorized Cub Scout or Boy Scout activity.

Is fishing next?

Boy Scouts wishing to do so are prohibited from trapping and butchering the meat they eat at official Boy Scout functions, but meat can presumably still be consumed at such functions. One part of being a Boy Scout, as I recall from my days as one, was regarding nature and the luxuries we routinely enjoy with a bit of humility and respect. One of those luxuries, for most of us, is a high level of meat consumption on a regular basis. A prohibition on obtaining the moral understanding that can only be obtained with a first hand experience in the production of that meat is ridiculous. I’m not saying killing an animal should be some form of universal requirement to “become a man” or even a requirement for advancement within the Boy Scouts hierarchy, but such activities shouldn’t be prohibited either. If Vegetarianism where to become a Boy Scout requirement, such a prohibition would make sense. However, that clearly is not the case.

The fact that Boy Scouts are formally prohibited from obtaining a real understanding of what they are putting into their mouths is a problem, part of the larger problem of the moral degradation of Western Society. We like our meat, but are unwilling to ponder from whence it came. We like our manufactured shoes, but are unwilling to ponder the life lived by the people in the Third World that assembled those shoes. We love our Foxconn-produced Apple products, but we are largely unwilling to even contemplate the staggering rates of suicide among Foxconn factory workers.

At some point in the life of a young boy or girl in Western Society, that boy or girl should be introduced to the source of the meat they eat. If they still choose to eat meat according to their own ethical impulses, so be it. Ditto for the working conditions of shoe manufacturers and electronics assembly factory workers.

If you are reading this on a computer or device you personally own – you are wealthy beyond the imaginations of many by virtue of that alone, and the lifestyle you maintain rests on the backs of millions. Some of those millions are animals, and some are humans treated no better than animals. At the very least, be willing to be aware of that and contemplate it once in a while.

And, for the record, Zuckerberg’s plan to be intimately aware of the food he is eating is not the luxury only a rich man has. Being wealthy, by world standards, means you can afford not to make eye contact with anything you’ve eaten. You can afford to have it abstracted from you. I recall eating at a nice restaurant in the third world, and seeing a restaurant employee butcher a goat in plain sight of customers.

A “poor” man in the first world can certainly afford to have the life of the animal abstracted from him – he probably shops at grocery store. The subsistence farmer or fisher or herder should be considered our example of poverty, not someone that can afford to pay someone else to grow, butcher, package, and ship food to his local grocery store. By definition, those subsistence farmers have absolutely zero economic impact at all, and are similarly of zero economic value. If someone is willing to pay you $10 an hour for a good or service you can provide and you are thus not forced to grow your own food or livestock, you are not poor by world standards. Poverty certainly exists in the United States, and certain parts of the United States certainly resemble the third world (Detroit comes to mind, comparing Detroit literacy rates and infant mortality rates to those rates in Third World nations) but it isn’t nearly as prevalent as some would have us believe – no one should be considered to be in poverty simply because they cannot afford a smartphone, a laptop, and a car.

It takes a helluva lot more than that. Do you have shelter? Clean drinking water? Is your child likely to be functionally literate as a result of attending a public school? Can you put 2,000 calories worth of food and necessary vitamins and minerals into your body? Do you sleep on a mattress? If Fred answers yes to all of those questions, Fred is not poor and Fred should be thankful for what he has. Fred has enough resources that he can probably make his way to somewhere that he can at least watch a factory farm video on youtube and then decide if he still wants to consume meat as a source of those needed calories, vitamins, and minerals. My answer is “yes,” but Fred’s answer can only be Fred’s own and ought to have at least some foundation of awareness of the implications.

If the thought of catching a fish, killing it, and gutting it sounds so appalling that you aren’t sure you can handle even thinking about, I’m not entirely sure you are on solid moral footing when you order fish at a restaurant. There may even be a small bit of hypocrisy there. The same applies to a horse, and using glue. Be honest with yourself: could you feed and pet an adorable cow or piglet, give it a name, and then subsequently kill it for nothing more than the desire to have a delicious meal? Do you avoid even thinking about the notion that someone else may be doing that, to provide you with a meal? If you find it repulsive to even think about, how do you justify eating bacon or beef (if you do)?

I’m certain there are people all over these United States that are forced to turn a feral dog or trapped raccoon into a meal from time to time. They do not have the wealth needed to abstract the food from the animal every single time. Zuckerberg clearly does have the wealth needed to abstract the food from the animal, and he has chosen to give up that luxury.

So, Concluding: Thank you Mark Zuckerberg for having the moral courage to lead by example – to be willing to look an animal in the eye and perhaps even pet the animal prior to butchering, preparing, and consuming it. Hopefully, other young people in Western Society will at least follow your example at least to the extent of pondering the source of the luxuries enjoyed.

Mark Zuckerberg’s Moral Courage

Exploiting Foreign Labor

In Mauritania, the 5-man detachment of Marines guarding the US Embassy worked about 70 hours a week and thus we didn’t feel like cooking for ourselves.

So, we employed Mohammed. He was paid $200/month, translating to about $1 per hour. He also kept up the common areas of the house.

On that so-called “slave wage”, he purchased land, hired an architect, and was having a two story house built with indoor plumbing. This also meant that his daughter could go to school instead of working or being married off at a young age.

If we’d been forced to pay him even $2 per hour, we simply would not have employed him. The time cost of cooking for ourselves would have been deemed less than the financial cost of employing Mohammed. We would have ceased being lazy and cooked for ourselves. His daughter would likely be less educated, the architect would never have been hired, and those construction workers would never have had that employment. It is also worth noting that, in his 50s, Mohammed was approaching his life expectancy in that countryemployment translates into access to semi-modern health-care.

Not that I am defending Nike workers that are paid less than $1 per hour in China — in order to do that, I would have to at least know how much a loaf of bread costs at the grocery store closest to that factory. I don’t have any idea what the costs of living are in the various cities containing Nike factories in China, so I do not have enough information to pass judgment either way.

Something to consider when we arbitrarily condemn US companies that outsource to cut costs.

Exploiting Foreign Labor